With a new agreement by bondholders, founder Skúli Mogensen has lost control of the company, reports suggest.
Owners of bonds in WOW air have voted to convert their debt into equity. But the airline is still under pressure with a total of four aircraft on the ground.
Last autumn, the ultra-low-cost carrier sold bonds in the company for total proceeds of €50 million. Due to its financial problems WOW has not been able to pay interest on the bond loans, however, prompting the bondholders to make their move.
“Reference is made to a market announcement of WOW air dated March 24, 2019, regarding WOW air’s advanced discussions with bondholders about voluntary restructuring including an agreement of converting current debt into equity,” a brief statement on the airline’s website reads.
“Bondholders have formally approved to convert their bonds into equity and formal discussions with investors have commenced to fund the company. This is an important milestone in financially restructuring the company and secure the long-term sustainability of WOW air.”
The announcement does not mention other creditors, such as Icelandic airport operator Isavaia or aircraft leasing companies.
With the new agreement, WOW air founder Skúli Mogensen has lost control of the company, the newspaper Morgunblaðið writes, as his company Títan Fjárfestingafélag no longer holds a majority stake.
Seven in the air
Meanwhile, WOW air struggles on with a number of operational disturbances. It was decided at the end of 2018 to cut the fleet from 20 aircraft to 11 and shut down a number of routes.
Currently it has just seven planes in operation. Two Airbus A321-200s have been seized by a leasing company in Montreal and Miami.
An A320-200neo is in Ljubljana for scheduled maintenance, while an A321 has been grounded in Iceland’s Keflavik Airport since March 18, when Isavia demanded it stay there as security for unpaid bills, according to local reports.
The seven aircraft still in the air are owned by two leasing companies – Los Angeles-based Air Lease Corporation and Dublin-based Goshawk Aviation.