Norse Atlantic ASA, the parent company of the low-cost, long-haul carrier Norse Atlantic Airways based in Oslo Gardermoen, has successfully secured a significant financial boost with a $20 million revolving credit facility. This crucial support, provided by its two largest shareholders, Scorpio Holdings Limited and B T Larsen & Co Limited, is aimed at strengthening the airline’s liquidity until October 15, 2024. The move is a strategic response to the substantial losses incurred in 2023.
Scorpio Holdings holds a 21.22% stake, while B T Larsen & Co, owned by CEO Bjørn Tore Larsen, owns an 18.88% stake in the company. Norse Atlantic stated that this unsecured credit facility, offered on market terms, is expected to enhance the financial stability of the company as it approaches the typically cash-generative late spring and summer seasons.
Despite facing a challenging financial landscape with a net loss of $168.7 million in 2023, the company’s management remains optimistic about the future. Norse Atlantic’s total operating revenue for the same period was $33.1 million, significantly up from $14.4 million in 2022, primarily earned through leasing out aircraft to third parties. However, the operating loss widened to $183.8 million, compared to $12.1 million in the previous year.
Looking ahead, Norse Atlantic is seeing a positive trend with increasing revenues and is actively engaging in negotiations to enhance its charter revenues, which are already surpassing the figures achieved in the previous year. The airline is also in advanced discussions with potential strategic investors to further improve its cash position, though these potential investments have not yet been factored into the company’s financial projections.
To support these strategic initiatives, Norse Atlantic has enlisted Seabury Securities UK as a strategic advisor. The company also highlighted recent efforts to increase capital, including a private placement that raised an equivalent of $55 million in November 2023 and a subsequent repair offering that brought in an additional $6.5 million in January 2024.
Norse Atlantic holds a Norwegian Air Operator’s Certificate (AOC) and a UK AOC, operating a total fleet of 15 aircraft, with plans to increase its operational fleet from 10 to 12 aircraft by the summer of 2024 and to 15 by the summer of 2025. The airline continues to expand its presence, having recently established a branch office in Knivsta, Uppsala County, Sweden, further solidifying its operational footprint in Scandinavia and beyond.
