BOC Among Lessors to Take Equity in Struggling Norwegian Airliner

On May 20, 2020, it was announced that China’s state-owned BOC Avi­a­tion was among a group of air­craft leas­ing com­pa­nies that acquired stakes in Nor­we­gian Air amid the airline’s near bank­rupt­cy as the coro­n­avirus pan­dem­ic con­tin­ues to hurt the glob­al trav­el indus­try. BOC’s  12.67% makes it a major­i­ty share­hold­er in the air­line along­side Ireland’s Aer­cap, which assumed a 15% stake in the air­line. Oth­er small­er air­craft leas­ing com­pa­nies also made sim­i­lar equi­ty arrange­ments, how­ev­er, BOC and Aer­cap remain the largest share­hold­ers

The leas­ing firms indi­cat­ed that they assumed shares as part of a debt con­ver­sion agree­ment between Nor­we­gian Air, and its bond­hold­ers, lessors, and share­hold­ers in an effort to boost the company’s equi­ty and mit­i­gate its risk of bank­rupt­cy, as this would unleash a sur­plus of used planes into the air­craft leas­ing mar­ket, in turn hurt­ing that seg­ment of the indus­try. A recov­ery plan for Nor­we­gian Air stip­u­lates that it will oper­ate sev­en air­crafts for up to 12 months after which point it will build up its fleet to approx­i­mate­ly 110–120 plans in 2022.

 BOC Aviation’s par­ent com­pa­nies include state-owned Bank of Chi­na and Chi­na Invest­ment Cor­po­ra­tion.