The High Court appointed an examiner to five Norwegian Group companies and their Norwegian parent, Norwegian Air Shuttle ASA, after finding each had a reasonable prospect of survival as a going concern. The court’s ruling was made on 7 December 2020; Mr Justice Quinn delivered his reasons on 16 December.
The five petitioners were Arctic Aviation Assets Designated Activity Company, Norwegian Air International Limited, Drammensfjorden Leasing Limited, Torskefjorden Leasing Limited and Lysakerfjorden Leasing Limited. They asked the court to appoint an examiner to Norwegian Air Shuttle ASA as a related company under section 517 of the Companies Act 2014.
The judgment said the five petitioners had their registered offices and centres of main interests in Ireland. The court treated their examinerships as main insolvency proceedings under the EU Insolvency Regulation. Norwegian Air Shuttle was incorporated and headquartered in Norway, outside the Regulation’s scope. The court instead considered its jurisdiction under Irish company law, finding that the parent had a sufficient connection with Ireland and qualified as a related company. It also considered legal opinions on recognition in England and Norway and was satisfied the purpose of the proceedings could be achieved for creditors and counterparties, including those of the parent.
The companies faced severe financial pressure after the Boeing 737 Max grounding and the COVID-19 pandemic. The petitioners said the Group’s third-quarter 2020 revenue fell 91 per cent from the same period in 2019, and that it was burning about $10 million a month. The independent expert reported that the companies could run out of working capital in early 2021 without restructuring. He considered survival possible if lessors supported the process, additional capital was secured and aircraft acquisition obligations were restructured, among other conditions.
The court considered concerns about the expert’s report, including treatment of Airbus pre-delivery payments and about €22.6 million in passenger refunds omitted from Norwegian Air Shuttle’s liabilities. The expert said accounting for these matters did not change his opinion on the prospects of survival. The judge accepted the clarifications for the appointment stage and said the examiner would need to consider them in formulating proposals.
No party opposed the petition. Rolls-Royce supported it; other creditors and interested parties were neutral or reserved their positions. Having considered the financial evidence, the interim examiner’s report and the companies’ restructuring efforts, the court found the statutory survival threshold met and appointed an examiner to the five petitioners and Norwegian Air Shuttle. The order began examinership proceedings; it did not approve a restructuring scheme or determine its eventual outcome.