Icelandair’s public share offering ended on Thursday afternoon, with “substantial oversubscription,” according to a press release issued by the airline on Friday. New shares worth ISK 20 billion were offered for sale. The offering was oversubscribed by 85%, with demand from both institutional and retail investors.
The public share offering was a key facet of Icelandair’s financial restructuring, one that had to be successful in order to receive to a state guarantee of 90% for a line of credit for up to $120 million (about ISK 16.5 billion). Though it has received government support in various forms since the COVID-19 pandemic began, the privately-owned airline has struggled, cancelling nearly three-quarters of its September flights, and 20 on Friday alone.
Over 9,000 stock subscriptions were received, worth a total of ISK 37.3 billion [$273.721 million; €231.160 million]. Icelandair’s board of directors has decided to accept subscriptions amounting to ISK 30.3 billion and expand the offering to ISK 23 billion [$169.641 million; €143.038] shares. The total allocated warrants of the offering came to 25% of 23 billion, or ISK 5.75 billion shares [$43.404 million; €35.758 million].
The allocation was “in line with the terms of the offering,” the press release continues. Existing shareholders who participated in the offering received a full allotment to correspond with their current stake. Around 1,000 thousand Icelandair employees participated in the offering and received full allocations, as did all subscriptions of ISK 1 million [$7,370; €6,218] or less. Other subscriptions received a proportional reduction of 37% or thereabouts.
Retail investors increased their ownership stake in the airline to 50%. Following the offering, Icelandair now has more than 11,000 shareholders.
The total number of outstanding shares in Icelandair air is now ISK 5.4 billion [$39.811 million; €33.586 million] and following the share increase, the total number of shares in the company will amount to ISK 28.4 billion [$209.3 million; €176.588].
Strong participation in the offering “marks the final step in the financial restructuring of Icelandair Group,” wrote CEO Bogi Nils Bogason. “With a broader investor base, strong balance sheet and by using the flexibility of the Icelandair route network, we will be in a good position to scale up quickly as soon as markets open again.”