WOW air stated (27-Nov-2018) 4Q2018 results were “materially worse than originally anticipated”. The company said a number of external and internal events have worsened significantly since it issued a EUR60 million floating rate bond on 24-Sep-2018 and the company is now working on securing its long term funding. The company noted the following events:
- During and following the bond issue, the company had significant bad publicity about its financial health, which had a more negative impact than anticipated on sales and the company’s credit position;
- The “negativity escalated” when Primera Air collapsed in Oct-2018, worsening “an already challenged situation”;
- Until recently, the company was making progress with finalising a sale lease back agreement, which has since been cancelled resulting in USD25 million less inflow than originally planned;
- Due to the “continuous negative events”, all the company’s lessors, creditors and authorities have demanded stricter payment terms, putting further pressure on the company’s cash flow;
- Oil “surged to new heights” after the bond issue, which also put pressure on the company’s financial outlook. The company said its position “has not recovered accordingly”.
WOW air stated: “We have been working diligently to seek additional funding and have received interest from a number of parties including Icelandair as has been publicly announced. Timing is a consideration as the situation described above has resulted in these funding initiatives becoming a necessity for the business”. [more – original PR]