THE HIGH COURT has approved a survival plan for the troubled Norwegian Air airline and related companies.
In a written decision Justice Michael Quinn said he was satisfied to approve the scheme put together by the airline’s examiner Kieran Wallace of KPMG.
The airline’s Oslo-based parent company and several of its Irish registered subsidiaries had sought the protection of the Irish courts due to factors including the devastating impact that the Covid-19 pandemic has had on the airline industry and international travel.
The group, the court heard had accumulated debts of US$5.2Bn.
In his judgement, Justice Quinn said after analysing the evidence put before the court by the examiner said he was satisfied that if the rescue proposals are confirmed and implemented, the restructuring achieved will facilitate the ongoing survival of the companies as going concerns.
The proposals, he added, “achieve for members, creditors and others, including employees, an outcome more favourable than would arise if the companies were wound up”.
The judge noted that the survival plan been approved by the members of each of the companies within the group and by at least one class of creditors.
The court said that there was no suggestion that the sole or primary purpose of the proposals is the avoidance of payment of tax due or that the proposals have been put forward for any improper purpose.
The proposals are fair and equitable in relation to each class of creditors which has not accepted the proposals and whose interests or claims would be impaired by implementation.
They are not unfairly prejudicial to the interests of any interested party, he said.
“The evidence of the examiner, which has not been contested, is that he is confident that the investment required to implement the proposals can be secured such that the purpose of the proposals can be achieved,” he added.
The judge added that “unusually, the court is being asked to confirm the proposals in circumstances where a series of further steps need to be implemented, including, most critically, the raising of the funds necessary to implement the proposals.”
He said that examiner, based on his account of his engagement with the companies, with certain significant investors, and the evidence of the support for the investment by the government of Norway, and the support of members and creditors, would be able to secure the level of investment required.
The judge added that he was also satisfied with the viability of the companies going forward.
In all the circumstances the court was satisfied to approve the scheme of arrangement.
Previously the court heard the examinership of the airline’s Norwegian-based parent and the three Irish based subsidiaries, was one of the biggest and most complicated examinership in the history of the state.
Last December the Irish High Court placed the airline’s Norwegian registered parent company Norwegian Air Shuttle (ASA) into examinership and appointed Wallace as examiner.
Irish registered Arctic Aviation Assets DAC, Norwegian Air International Ltd, Drammensfjorden Leasing Ltd and Lysakerfjorden Leasing Ltd, were also granted the protection of the Court from their creditors.
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Those firms are involved in activities including the leasing, management and subleasing of assets, including aircraft, and financing.
Arising out of Norwegian’s decision to cease its long-haul services the examiner to the companies the court ordered the winding up another Irish-based subsidiary, Torskefjorden Leasing Ltd (TLL).
The group’s creditors include subsidiaries of Airbus, Boeing, aircraft leasing firms Avolon, several lenders and financial firms, and the Irish Revenue Commissioners.
In 2019 the group had employed over 10,000 staff and had operated 20 bases in 11 countries.
However, the last number of years have been extremely difficult for the group and it commenced several cost reduction measures aimed at restoring it to profitability.
The airline was severely impacted by the outbreak of the Covid19 pandemic, and had gone into hibernation.
The grounding of Boeing 737 Max, and Boeing 787 Dreamliner aircraft also adversely affected the airlines finances.
While it had entered into arrangements regarding its debts under a restructuring plan the Norwegian government announced late last year that it would no longer provide any more State financial support to the group.