Indigo Partners Considers Investing Further in WOW air Skip to content
Photo: Flug Flugvöllur flugáhöfn.

Indigo Partners Considers Investing Further in WOW air

Indigo Partners will invest up to ISK 10.9 billion ($90 million, €80.1 million) into WOW air, an increase of the amount of ISK 5.6 billion ($46 million, €40.9 million) which was first proposed. WOW air shed light on this development in a statement on their website earlier today. The investment will take place given that certain conditions are in place.

This development suggests that the two parties are closing in on a final agreement, but there is no formal agreement in place as of now. A due diligence report is still to be performed.

The statement also states the Skúli Mogensen’s stake in WOW air will change. Skúli is the CEO, founder and sole owner of WOW air, and he might see his stake end up anywhere between 0% to 100%, depending on how WOW air fares financially in the next three years.

Furthermore, Skúli will most likely write off a subordinate loan which he gave to WOW air a while back. Skúli’s investment fund, Títan, gave a WOW a loan of ISK 730 million ($5.9 million, €5.3 million) to help cover running costs.

WOW air has found itself in financial doldrums in recent times. It was revealed that the company has postponed the complementary contribution to their employees’ pension funds. The company now owes employees that contribution for December, January, and February. In a recent move, WOW air also announced flight offers to European cities for low amounts.

WOW air shareholders, who bought shares in a bond offering in September of last year, will be asked to review and accept new terms of their stakes. The new terms state that their returns will be connected to WOW air’s financial performance in the next years. The returns on the stakes can be anywhere between 50% to 100% of the share’s worth. It has also been suggested that the rates of the shares are decreased from 9% to 7%. The shares will also be extended to repayment within five years, rather than the originally proposed three years.

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