UPDATE 1-Norwegian Air seeks debt restructuring as coronavirus crisis grounds fleet

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OSLO, April 8 (Reuters) – Norwegian Air is proposing a conversion of debt to equity as well as a share issue as it seeks to stay in business following the COVID-19 outbreak that has grounded almost all of its fleet, the budget carrier said on Wednesday.

By boosting its equity, the airline would also qualify for government guarantees of up to 3 billion Norwegian crowns ($292 million).

“Norwegian aims to strengthen its balance sheet by converting debt to equity to meet the requirements of the Norwegian state guarantee program and create a sustainable platform,” it said in a statement.

An extraordinary general meeting will be held on May 4 to vote on the plan, Norwegian said.

“The proposed measures are necessary in securing the next tranches of the Norwegian government state guarantee program,” Chief Executive Jacob Schram said in a statement.

“They are also necessary for the future of the company by strengthening the company’s balance sheet,” he added. ($1 = 10.2693 Norwegian crowns) (Reporting by Terje Solsvik, editing by Victoria Klesty and Jane Merriman)

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