Norse Atlantic has successfully raised NOK 300 million ($30 million) through a conditional private placement of 120 million new shares. Proceeds of the placement will be used as a cash buffer for the airline’s subsidiary Norse Atlantic UK. Norse secures financial buffer for its Gatwick operations.
The private placement was announced on November 24 and completed a day later. It was oversubscribed 1.5 times by “high-quality” new and existing investors from Norway and abroad, which demonstrates strong confidence by investors in Norse’s business model and strategy, the airline says in a media statement.
Norse’s biggest shareholder, BT Larsen & Co Ltd which is closely related to Norse CEO Bjorn Tore Larsen, pre-committed to subscribe for NOK 203 million of the shares of NOK 2.5 each. Due to the strong demand, its commitment was scaled back to an allocation of approximately NOK 93 million (around 31 percent of the private placement) in order to improve the overall free float in the company. How this has affected its previous 12.82 percent share needs to be confirmed.
Others that have been allocated new shares include Norse board member and former Norwegian CEO Bjorn Kjos through his company Observatorie Invest, as well as Chief Technology Officer Gisle Stavland through GS Consulting, and Chief Financial Officer Ben Boiling through Bosel. A six-month lock-up has been agreed upon for the company. Approval of the placement will be asked during an extraordinary shareholder meeting on December 9. Norse has proposed a subsequent offering of sixty million shares to existing eligible shareholders.
UK AOC granted in September
Norse launched operations only on June 14 this year, after having delayed the launch a number of times during the 2021 Covid crisis. In late September, Norse was granted an Airline Operator Certificate (AOC) and Operating Licence (OL) by the UK’s Civil Aviation Administration (CAA). This was a prerequisite for the carrier to launch direct flights out of London Gatwick to the US next summer, for which it was granted permission from the Department of Transportation in mid-October. Norse announced a daily service between Gatwick and New York JFK from March until October 2023, plus a daily ‘feeder’ service between London Gatwick and Oslo.
Part of the CAA’s conditions for getting the AOC and OL is that Norse Atlantic UK demonstrates that it is financially solid and is able to invest $46 million in the UK subsidiary. This investment is now covered by the net proceeds of $30 million from the private placement, which enables the carrier to operate and increase the number of flights operating from the UK to the US and cover general corporate purposes.
“This successful equity raise will allow Norse Atlantic to build on its already strong financial base. We were already in a much stronger position strategically and financially than many other airlines and we now look forward to growing from strength to strength as we look ahead to our UK summer 2023 operations and wider route network”, said CEO Bjorn Tore Larsen. Besides the routes out of London Gatwick, Norse will offer New York JFK, Fort Lauderdale, and Los Angeles from Oslo and New York JFK from Berlin next summer. From March, it will operate Paris to JFK. This follows a reduced network in the coming winter period.
“We are proud that the investor market has shown such strong confidence in our strategy and for the support that we have received. We will continue to focus on profitable point-to-point routes, delivering an excellent customer experience and offering the best value in the industry.”
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.