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Norwegian to raise 300 mn euros to bolster finances

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Oslo (AFP)

Struggling low-cost carrier Norwegian Air Shuttle said Tuesday it planned to sell new shares to raise three billion kroner (309 million euros) to meet financial obligations as it restructures and cuts costs.

Norwegian, ranked third in Europe behind Ryanair and Easyjet, also reported an operating loss (EBITDA) of 2.2 billion kroner for 2018 on revenue of 40.3 billion kroner, reflecting the difficulties the fast-growing company faces.

"Norwegian has been through a period with significant growth. Focus going forward will increasingly be on cost savings and (capital expenditure) reductions," it said in a statement.

"We will now get in place a strengthened balance sheet that supports the further development of the company," it added.

The cash call was widely expected as the airline has juggled new services, especially long-haul routes, with a large and costly order book of new planes which it has had to cut back sharply to stabilise its finances.

Last week, British Airways parent company IAG, which holds 4.0 percent of Norwegian, said it had decided against an offer for the airline.

Norwegian said existing shareholders had agreed to take up all the new stock on offer to raise three billion kroner.

An extraordinary shareholders meeting next month will discuss the plan, with the share offer scheduled for late February to early March.

Norwegian shares fell sharply in reaction to the news, losing more than 25 percent in early deals after heavy losses last week on the IAG announcement.

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