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WOW air bond issue “going well”

31.08.2018 - 11:34
Mynd með færslu
 Mynd: WOW air
Skúli Mogensen, the CEO and owner of WOW air, has revealed that a handful of overseas investors have already signed up to buy a large portion of the airline’s bond issue. He said the interest payable on the investment is in the region of nine percent, which he feels is “very acceptable given the market conditions”. Investors loaning WOW air money through the bond issue will have the automatic right to buy shares in the company when it registers on the stock market.

Bondholders will be allowed to buy up to half of the shares in WOW air when it registers on the stock market in the future, and those that choose to do so will enjoy a 20 percent discount on the share price, Skúli told Fréttablaðið today.

According to the information to potential investors, the airline has been advised to sell bonds for the value of 6-12 billion krónur. 

WOW air operated with a 2.4 billion króna loss last year, despite increased income. Skúli Mogensen increased his own investment in his company earlier this year. He did this by transferring his loans to the company into assets and by transferring his shares in Cargo Express over to WOW. The company’s financial position was better as a result than it might otherwise have been. 

The financial difficulty of Iceland’s two big airlines has been in the headlines recently. The transport minister has confirmed that the government is working on a plan of action in the event that either should get into serious trouble. The CEO of Icelandair resigned earlier this week over the company’s recent losses.