Norwegian Air boss takes share hit in bid to raise fresh cash

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NORWEGIAN AIR will sell new shares at just a third of the current market price when the loss-making airline seeks to raise money from investors the next few weeks, it said on Monday.

It said last month that it planned to raise three billion Norwegian crowns (€308m) in a share sale to bolster its finances, just days after British Airways owner IAG ruled out a bid for the budget airline.

Norwegian is trying to replicate on transatlantic flights the low-cost model that dominates the short-haul market via companies such as Ryanair and easyJet, but is struggling to make the business profitable.

In the rights issue, Norwegian's shareholders will get two subscription rights to buy shares for every share they currently own.

The new shares will be sold at 33 crowns each, compared with last Friday's closing price of 97.34 crowns.

By selling new shares far below the current market price, Norwegian will boost the value of each of the purchasing rights, which can in turn be bought and sold.

Earlier on Monday, Norwegian's chief executive and the board chairman said they would sell some of their subscription rights to other investors, in a move that would reduce the 24.66pc stake they currently hold in the airline.