Sweden’s Debt Office said today that it has refused a state credit guarantee for Norwegian Air, renewing liquidity concerns for the struggling airline amid the coronavirus crisis, Reuters reported. Norwegian Air was already facing financial difficulties before the pandemic hit and Sweden has stipulated its credit guarantees, under a programme mitigating the impact of COVID-19, can only be granted to airlines assessed to have been financially viable on the last day of 2019. “The Debt Office’s assessment in regard to Norwegian is that as of 31 December 2019 there was a very high risk that Norwegian would not be able to fulfil its financial commitments and that the company was not deemed capable then of managing further indebtedness,” it said in a statement. “Therefore, the company has not been considered financially viable as of 31 December 2019. Accordingly, Norwegian’s application has been denied.” While there will be no immediate impact on the airline, it has indicated it would need more cash to rebuild after the coronavirus crisis hit its operations hard. The group received emergency financial guarantees from the Norwegian government in May, but only after raising cash from owners and forcing creditors to convert part of the debt to equity.
