Flyr (Norway) (Oslo Gardermoen) has said it is “in a serious financial situation” after failing to raise the capital it needed, and its board will now “assess whether there are alternatives for continued operation.” As its stock price plummeted, it assured in one of its statements issued on January 30 that “today’s flights are running as normal.”
The loss-making carrier said it had informed the Oslo Stock Exchange on the morning of Monday, January 30 that the company “has not been successful with its new financing plan.” That same day’s flights from Oslo to Alicante, Gran Canaria, and Malaga will operate, it pledged, adding: “The company has no scheduled flights on Tuesday and information about future flights will be shared as soon as possible on flyr.com.”
In its Oslo Børs filing, it lamented that “market conditions and continued uncertainty with regards to airline travel and earnings through 2023 have deterred investors from committing capital for the required period of time, in spite of the company’s wet-lease opportunities and improving ticket sales.”
It said that “due to the unsuccessful process to underwrite a rights issue or carry out a private placement, the company is now in a critical short-term liquidity situation.” The board will continue to try to find “feasible alternatives to secure continued operations [but] there is no guarantee that a solution that would create meaningful shareholder value for current shareholders will be found.”
Flyr said in early November that it was hoping to raise up to NOK530 million kroner (USD53.5 million) in new equity to survive the lean winter season. It failed to secure that amount but opted to rejig its fundraising later that month and managed to raise NOK250 million (USD24.9 million) in a share issue.
This was only half the cash it needed as it prepared for a ramp-up in spring 2023. Most recently, it had been trying to secure further funding of EUR330 million euros (USD33.2 million) in a rights issue but had “not yet been able to raise the sufficient market underwriting.”
Options for the airline had included increased wet-lease operations, and a month ago it said it had applied to the United States Department of Transportation (DOT) for a foreign air carrier permit to operate chartered and ACMI flights from November 2023 as it had seen “an increasing number of requests from North American companies.” In mid-December, it initiated discussions with a European airline for a wet-lease arrangement for six aircraft for the 2023 summer season, to start at the end of March. Such a deal “would considerably de-risk the business case and improve the chances of succeeding with a new financing plan,” it said.
To be ready to perform these obligations, Flyr “had to reverse some of the liquidity preserving measures it had planned and implemented, as the wet-lease agreement was considered instrumental in securing the new financing plan that would address” both its short-term and long-term funding requirements. This drove it to seek the as-yet unfulfilled EUR330 million rights issue.
Also on January 30, Oslo Børs decided to temporarily place the company in its Recovery Box, a “special compartment” where the stock exchange can place securities “when the issuer is subject to circumstances that make pricing of the securities particularly uncertain.” Such a category does not affect trading.
