Reference is made to the press release of Icelandair Group (the “Company”) published on October 3rd 2018 regarding a potential non-compliance with the gross leverage covenants in clauses 12 (b) and 12 (c) (the “Covenants”) of the terms and conditions of the Company’s USD 190 million senior unsecured bonds carrying ISIN NO0010776982 (the “ NO Bonds”). The Covenants also apply according to the terms and conditions of the Company’s USD 23,660,000 unsecured bonds carrying ISIN IS0000025427 (the “IS Bonds)”.
In connection with the finalisation of the Q3 results as announced today, it was confirmed that the Company is in breach of the Covenants. The Company has had a constructive dialogue with bondholders regarding a long-term solution and requested that the bondholders vote in favour of a temporary waiver of the breach of the Covenants throughout November 2018 to give more time for the discussions regarding a long-term solution. The temporary waiver has support from bondholders representing a majority of the NO Bonds.
The Company has also initiated discussions with bondholders of the IS Bonds and expects to reach an identical long-term solution regarding these bonds. A temporary waiver of the Covenants throughout November 2018 has support from over 85% of the bondholders and the Company will also continue discussions regarding a long-term solution.
Despite the covenant breaches, Icelandair Group’s financial position remains strong. At the end of September, the Company’s cash and short-term investments amounted to USD 184 million, the Company's equity was USD 575 million, and the equity ratio was 36%. Furthermore, operating assets amounted to USD 674 million and prepayments on the balance sheet due to new aircraft amounted to USD 176 million. At the same time, the total interest-bearing liabilities amounted to USD 406 million of which secured debt amounted to USD 194 million.
DNB Markets is acting as the Company’s financial adviser.
Bogi Nils Bogason, Interim President & CEO
+47 24169030 / firstname.lastname@example.org