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Keflavík airport Icelandair
Photo: Golli.

Government Guarantees Line of Credit for Icelandair

The Icelandic government has decided to guarantee a line of credit for Icelandair airline. The guarantee amounts to ISK 16.5 billion ($121 million/€101 million).
Negotiations between Icelandair group and the Icelandic government have taken place in recent weeks, in co-operation with the airline’s banks, Íslandsbanki bank and Landsbankinn bank. The initiative is subject to the two parties reaching an agreement on the terms, the approval of the Icelandic Parliament, and the success of Icelandair’s planned refinancing initiative.
Icelandair has postponed its public stock offering from August until September. Úlfar Steindórsson, chairman of the airline’s board, told Vísir that the reason for the postponement is a delay in negotiations with credit holders as well as the airplane manufacturer Boeing, due to problems with their Max 737 planes. Icelandair had to ground a number of Max 737s and an agreement was in place for the purchase of additional aircraft.

Icelandair CEO Bogi Nils Bogason stated earlier this month that the prerequisite for the government line of credit was that the company’s planned public stock offering was successful. The two factors are intertwined, however, as investors require the details of the line of credit terms.

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