Bondholders of struggling Icelandic airline WOW air who invested in the company for 60 million euros just last fall, might have to accept large write-offs of their shares in order for the possible investment of equity firm Indigo Partners in the company to go through, Fréttablaðið reports.
Additionally, Indigo Partners have reportedly demanded that the share of WOW air’s current CEO, Skúli Mogensen, be drastically reduced from what was previously discussed.
These conditions were put forth by Indigo Partners at a meeting with Skúli last Thursday, the same day a deadline given by the company’s bondholders to reach an agreement with the company was reached. The deadline has now been extended until the end of March.
Indigo Partners demands reportedly came as a shock to Skúli. According to insiders, Skúli was expecting a much easier deal to go through. Last week, WOW air representatives secured a deal with the airline’s proprietors, paving the way for a deal with Indigo Partners, an equity firm that has a controlling interest in airlines such as American Frontier Airlines and JetSmart.
Representatives of the firm are reportedly well aware of their strong negotiating position against Skúli and and WOW air bondholders, who have little choice but to agree to Indigo Partners’ terms, considering their other option seems to be the bankruptcy of the company.
Indigo Partners have declared that the company is ready to invest for up to 75 million dollars in WOW air