Icelandair Group will start discussions with its creditors today, Vísir reports. The discussions will be held with creditors who own over 50% of Icelandair Group’s issued non-index-linked bonds. The face value of the bonds owned by the creditors is ISK 21,5 billion ($190 million / €164 million).
This came forth in an announcement made by Icelandair Group, which points to the updated EBITDA projection of the company, which was published on the 27th of August.
The announcement stated: “In light of the updated EBITDA projection, it’s possible that the financial duties regarding the ratio of the total interest-bearing debt, which are stated in articles 12 (b) and 12 (c) in the bond stipulations, will not be fulfilled according to the settlement of the company’s third quarter which shall be published before the end of November”. In other words, Icelandair expects that it will not be able to fulfill the financial stipulations of its bonds contracts due to a worse-than-expected financial quarter, and is therefore seeking a settlement of some sorts with it’s largest creditors.
The announcement also stated that Icelandair Group is assessing its options, following the EBITDA projection, “for example asking for a temporary exemption from the financial obligations to creditors, changes to the bond stipulations, or either the partial settlement of bond or settlement of other debt. Even though there is a possibility that the bond stipulations about the ratio of the total interest-bearing debt will not be fulfilled, Icelandair Group’s cash reserves were $237 million on the 30th of June. The company’s capital amounted to $530 million and the equity ratio was 32%. The book value of the company’s assets were $673 million and $143 million had been pre-paid for new airplanes in the company’s balance sheet. At the same time the total amount of interest-bearing bonds was $343 million, thereof $121 million index-linked”, part of the statement read.