BA Boeing Co

  By Dominic Chopping 
 

Icelandair Group Hf said Monday that it is making progress with shareholders over a financial restructuring of the company as it seeks government aid, but that talks with certain creditors are yet to yield results.

The carrier is seeking to launch a share offering to raise up to $200 million as well as the conversion of debt into equity, both prerequisites for government support in the form of a credit-line guarantee.

New long-term collective-bargaining agreements have been reached with the unions of pilots, cabin crew and mechanics, while work on terms with the Icelandic government, along with Islandsbanki and Landsbankinn, regarding a government guaranteed credit facility is in progress.

However, the credit facility will be conditional on the company receiving sufficient concessions from creditors and the successful conclusion of the planned share offering, it said.

"Icelandair Group has received positive feedback from most of its creditors, who remain willing to work with the company through this process. However, negotiations with certain pivotal counterparties have not been concluded," the airline said.

Those counterparties include aircraft lessors and a credit card acquirer.

Icelandair added that it is still negotiating with Boeing over further compensation due to the Boeing 737 MAX grounding and the state of future deliveries of aircraft.

If agreements can be completed with the remaining shareholders in July, the company intends to initiate an offering of new shares in August. However, if these negotiations are unsuccessful, the company will need to initiate a new phase of its restructuring process without the government-guaranteed credit facility.

This process could last for up to 12 months and the company would be required to seek deferral of any payments to financial creditors.

The cash position of the company is currently around $150 million, which is in excess of three-month fixed operational cost in the current environment.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

June 29, 2020 06:32 ET (10:32 GMT)

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