Icelandair Aims to Raise ISK 29 Billion Through Public Stock Offering

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Icelandair hopes to raise up to USD 200 million [ISK 29 billion; €1.82 million] in equity through a public stock offering in June. The company’s board of directors announced their intentions, which they say is “an important part of the financial restructuring of Icelandair Group,” in a statement sent to the Icelandic Stock market on Thursday night.

If approved at the company’s shareholders’ meeting in May, the stock offering would “enable the Board to increase the share capital of the Company by up to 30,000 million new shares,” reads the statement. “The Board further proposes that current shareholders waive their pre-emptive rights to the new shares. The public, along with other investors, will thereby be given the opportunity to subscribe to new shares in the Company. Furthermore, the Board will have unilateral authority to determine the allocation of new shares, but efforts will made to provide full allotment to existing shareholders and employees.”

See Also: Icelandair Lays Off Record 2,000 Employees

The announcement comes in the wake Icelandair laying off 2,000 employees on Tuesday in the single largest layoff in Icelandic history.

“Icelandair Group has been in close contact with the Icelandic Government” during its restructuring process, concludes Thursday’s statement, which also notes that the Icelandic government “is willing to consider granting the Company a credit line or providing a guarantee for such credit line conditioned upon the completion of the share offering.”

Icelandair will publicly announce the price of the new shares, as well as related terms and conditions, following the proposal’s presumed approval at its upcoming shareholders’ meeting.

Íslandsbanki Lays Off 20 Employees

Íslandsbanki laid off 20 employees today, most of whom worked at the bank’s headquarters in Smáralind, Vísir reports. The bank dismissed 20 employees in September and 16 in May.

In an interview with RÚV, Birna Einarsdóttir, CEO of Íslandsbanki, expressed lament. “The days are always sad and tough when we must resort to such measures.” Íslandsbanki’s staff has shrunk by approximately 90 employees, or 10-12% in total, in 2019.

“We cannot guarantee that this will be the last round of lay-offs, but we hope so.” According to Birna, the banking environment is evolving rapidly and Íslandsbanki must evolve as well. “Some of these changes today are organisational in their nature. Job descriptions are changing.”

An earnings report for the third quarter indicated that return on equity was below the bank’s target. “It’s our goal to improve return on equity to the satisfaction of the bank’s owners. To that end, various measures must be taken.”

Terms of notice differ between employees. According to Birna, the term of notice is approximately six months. In most cases, however, the employees will cease work at the end of November.

Íslandsbanki is fully owned by the Icelandic State Treasury. It is not the only bank to have laid off employees this year. In September, Arionbanki laid off approximately 100 employees.