Norwegian examinership further extended due to Covid-19

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Another complicating factor, the court heard, is the companies' ongoing efforts to have aircraft leases and service contracts it had entered into repudiated.
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Ann O'Loughlin

The period of protection granted to Norwegian Air airline and three related subsidiaries from its creditors has been further extended by the High Court by an additional 50 days.

The extension, from 100 to 150 days, was granted by Mr Justice Michael Quinn on Friday, after he was satisfied that the exceptional circumstances of the devastating impact that Covid-19 has had on the airline, exist to allow the court extend the period of protection.

Seeking the extension, the airline's examiner Mr Kieran Wallace of KPMG said extra time was required in order to agree a scheme of arrangement with the airline's creditors, which if approved by the High Court, would allow the airline continue to trade as a going concern.

Paul Sreenan SC, with Kelley Smith SC for the examiner said the impact of the pandemic, which was the primary reason why the airline sought the protection of the courts continues to cause serious disruption and uncertainty to the aviation sector.

Complicated examinership

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Counsel said the examinership of the airline's Norwegian-based parent and the three Irish based subsidiaries, was one of the biggest and most complicated examinerships in the history of the State.

Recent developments such as regional and new variations of Covid-19 and issues over the delivery of vaccinations had added to the uncertainty, counsel said.

The uncertainty had not helped the examiner in his efforts to put together a scheme with creditors, and had not helped in efforts to secure the fresh investment the airline needs to survive.

Another complicating factor, the court heard, is the companies' ongoing efforts to have aircraft leases and service contracts it had entered into repudiated.

Lease agreements

The company says that if it is to survive it needs to have those agreements set aside.

Several contested applications regarding leases, arising mainly out of Norwegians decision to reduce its fleet when it opted to cease its long-haul services, are due before the High Court next week.

In the circumstances it would not be possible to conclude the examinership process in a 100-day period, which is normally the maximum period allowed.

While Mr Wallace was seeking the maximum 50-day extension, he remains hopeful of being a position to put the proposal to the courts in 25 day, but was seeking the additional time in case of any slippage.

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Counsel also told the court that despite the difficulties Mr Wallace "remains confident" that he can put together a proposal that will allow the airline to survive.

There was no opposition to the application to extend the period of protection.

The group's creditors include subsidiaries of Airbus, Boeing, aircraft leasing firms Avolon, several lenders and financial firms, and the Irish Revenue Commissioners.

 

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