[OSLO] Budget airline Norwegian Air has secured a long-sought credit guarantee from Norway's government after completing a debt restructuring, it said on Wednesday, allowing it to survive in a slimmed-down version.

Following the grounding of almost all its fleet due to the coronavirus pandemic, the company had said it would run out of cash in mid-May unless it was able to qualify for the 2.7 billion Norwegian crowns (S$382.4 million) state package.

The government in a separate statement confirmed the airline would get the guarantee. Norwegian had already secured a US$30 million payout at an earlier stage, taking the overall loan to US$301 million.

Bondholders, lessors and shareholders agreed in recent weeks to a 12.7 billion crowns debt conversion and share sale that boosted Norwegian's equity ratio to 17 per cent from 4.8 per cent at end-2019, exceeding the minimum government requirement of 8 per cent.

REUTERS