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(Adds detail, analysts, updates share price)
OSLO, Nov 6 (Reuters) - Norwegian Air's shares fell
by 9% in early trade on Wednesday after the struggling budget
carrier conducted its third share issue in less than two years
on Tuesday.
The cash call was the latest move by acting Chief Executive
Geir Karlsen and Chairman Niels Smedegaard, both of whom were
appointed earlier this year, to prevent Norwegian from joining
the ranks of recently collapsed airlines.
The company raised 2.5 billion Norwegian crowns ($272
million) from a combined sale of shares and convertible bonds,
which it said would cover its needs "through 2020 and beyond
based on the current business plan".
The new shares were sold at 40 crowns each, a 13% discount
to Tuesday's closing price of 46.06 crowns. The company's shares
traded at 41.80 crowns at 0904 GMT.
Norwegian's interest-bearing debt stood at a whopping 61.7
billion crowns at the end of the third quarter, and the company
has this year replaced breakneck expansion with cost cutting to
regain profitability.
It plans to shrink its capacity by 10% next year, it said
recently, and has sold older aircraft as well as its stake in
Bank Norwegian. In September it convinced bond holders to accept
an extended deadline for repayment to preserve cash.
It also entered into a cooperation agreement with U.S.
carrier JetBlue Airways that will funnel passengers
into Norwegian's transatlantic network, and offloaded an order
of Airbus planes to a Chinese banking firm.
But credit card companies, fearing large liabilities in case
the company did not survive, have held back payments, while
engine problems on some planes and the grounding of the Boeing
MAX fleet added significant cost.
Along with cost cuts and divestments, the share and bond
sale reduces the overall risk of investing in Norwegian, said
Danske Bank analyst Martin Stenshall, who holds a 'Buy'
recommendation on the stock.
Brokers Nordnet said the company's shares could eventually
rise on the news.
"The added capital could turn out to be the factor that
convinces investors," it said in a note to clients.
($1 = 9.1965 Norwegian crowns)
(Reporting by Terje Solsvik and Gwladys Fouche, additional
reporting by Stine Jacobsen in Copenhagen, editing by Louise
Heavens and Jon Boyle)
