Norwegian management's christmas wish of rescue

Norwegian have today presented a new plan for how they dream the company can be rescued. 

Lets talk about the positives first. They are planning to do a reverse share split by a factor of 100 from over 3 billion to round 30 million. There have been comments that sees shares only worth some norwegian øre (100'th of a Norwegian Krone (nkr)) as signs of a company in distress and leading to a share price easily manipulated = penny stocks. For any hope for the future they need to be able to have shares with an exchange worth of whole nkr's.

Theis leads us to the question wether there are enough small investors in Norway, and maybe other Scandinavian countries with enough cash to waste to swallow up a new issue of 4 billion nkr of even more new shares whose value could be lost nearly before they are isued. After all they say straight out that they hope the shareholders will continue to support them for even further future recapitalizations.

If there are that many willing to throw even more good money after the bad, they won't have any power to effect board or leadership changes to a degree that matters. So more of the same, and that is not a good thing when one look at their hibernation preference instead of like nearly every other airline fight for every bit of possible extra revenue.

Other things presented on what I can't call anything else than managements wet dream Christmas wishlist is: 

Power by the hour into 2022. What plane owner is going to accpt that at this stage when vaccines are in the early stages of rollout and many airlines forecast a return to near normality, or even normality+, by latest end of summmer 21.

That debt owners will convert their bnow secured debts to potentially again worthless shares. Like they where lured to earlier this year. And I assume again to a premium on issue price. Isn't the current conversion 4 nkr worth of repayments/debth turned into 0.32 nkr (current share price) worth of shares.

Converting their debt to uncommitting shares is what every company management would prefer. The reason it doesn't happen is that debtholders are either not interested in taking the associated risk of being an in this case airline owner, and/or prefer the steady secure income from giving loans and taking interest payments. So normally companies if they want to reduce indebtness have to produce profits and pay the debt off. 

Norwegian management might have a long term subversive strategy in this. First ensure that no owner grouping will be strong enough to throw them out. Securing a meek board without strong single shareholder backing whose members are just in it for the money or the prestige. A sort of continued managment takeover but without risking their own money and instead securing genereous salary payouts and repeated stock option grants well into the future. Secondly ensure that so many Norwegians become share owners that there will be even more public pressure on their government for further future support from the exchequer.

All this while preparing the rescue through alienating it customers by stopping to refund those whose prepaid flights they haven't been able to complete. This begs the question; Can something be long term rescued that don't have a clean break from when they took their customers money and gave them nothing in return.

Problem is all of Norwegian's plans are financial. We are missing an operational side for what they will be doing if they succeed in securing them. And don't come with the plan of pre CoVid19 is still the plan. That should have died in the pandemic and needs to be replaced with something that shows that there is a path to a relative sizeable and profitable future. But for theat it requires imagination and the only that shows any of that is who comes out as the getting more finances mastermind Geir Karlsen. Nobody on the commercial / route planning / sales / revenue / cost-control / operational side, or for that the CEO end of things have any other plans than more of the same that didn't work the last time around.