WOW air hf. publishes weakened financial projections and information on decrease of sales and liquid
WOW air hf. publishes weakened financial projections and information on decrease of sales and liquidity concerns
On 24 September 2018, WOW air hf. (the "Company") issued senior secured floating rate bonds on the Nordic bond market in an amount of EUR 60 million within a total framework of EUR 100 million. The bonds carry a floating rate interest of EURIBOR plus 9.00 per cent per annum and mature on 24 September 2021 (the "Bond Issue").
Since the date of the Bond Issue, a number of external and internal events have worsened significantly and the Company is now working on securing its long term funding.
During and following the Bond Issue, the Company had significant bad publicity about the financial health of the Company which ended up having a more negative impact on the Company's sales and credit position than anticipated. As a result, the Q4 results are materially worse than originally anticipated.
Secondly when Primera air collapsed in October the negativity escalated which has further worsened an already challenged situation. The Company was until recently making progress with finalizing a sale lease back agreement which has since been cancelled resulting in USD 25 million less inflow than originally planned.
Thirdly and due to the continuous negative events, all the Company's lessors, creditors and authorities have been monitoring the situation even closer and demanded stricter payment terms then before further putting pressure on the Company's cash flow.
Last but not least oil surged to new heights in the weeks and months after the bond issue which at that time also put pressure on the Company's financial outlook. While this has since retreated the impact on the Company's position during these weeks has not recovered accordingly.
With the above in mind we have been working diligently to seek additional funding and have received interest from a number of parties including Icelandair as has been publicly announced.
Timing is a consideration as the situation described above has resulted in these funding initiatives becoming a necessity for the business.