New Nordic airline begins US$150m placing in bet on rebound

[OSLO] Startup carrier Norse Atlantic Airways began a US$150 million share placement to bankroll the launch of trans-Atlantic flights this year even as air travel remains mired in its worst-ever slump.

Shipping entrepreneur Bjorn Tore Larsen, Norse's chief executive, will subscribe for stock worth the equivalent of US$10 million, while US$64 million has been allocated to six backers including Handelsbanken, DNB Asset Management and Nordea Investment Management, according to a filing Tuesday.

Following the private sale at 20 kroner (S$3.13) a share the airline plans to list on the Oslo Stock Exchange in mid-April.

Norse, founded by executives with ties to Norwegian Air Shuttle, is aiming to fill a gap in the market created when the discount specialist filed for insolvency. It's betting that cut-price fares will stir up demand on trans-Atlantic flights once travel curbs are lifted. Proceeds from the share sale will provide working capital and fund lease deposits on as many as 12 Boeing 787 Dreamliner aircraft previously used by Norwegian.

The placing is the second by a new airline in Norway in barely more than a matter of weeks after short-haul startup Flyr AS raised 600 million kroner, backed by investors that again included Nordea.

Norse is targeting a December introduction of services linking US cities such as New York, Los Angeles and Miami with London, Paris and Oslo, with further expansion to add destinations in Asia.

Mr Larsen has said the company will stick to routes that are popular and profitable. That may be a challenge under its current launch timetable as new waves of Covid-19 prompt further lockdowns and prompt governments to review plans for reopening travel.

BLOOMBERG