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Press release, news and information.
WOW air hf. – All Warrant holders agree to Warrant Cancellation Agreement
Reykjavik, Iceland – January 18, 2019
ISIN: NO – Senior Floating Rate Bonds with an aggregate outstanding amount of USD 60,000,000.
Reference is made to the market announcement of WOW air (“WOW“), dated 29 November 2018, of the signing of a term sheet for the proposed investment of Indigo Partners LLC ("Indigo Partners") in WOW air.
In connection with the aforementioned bonds, WOW issued on 2 November 2018 share warrant instruments (the "Warrants").
Pursuant to a Share Purchase Agreement that will be negotiated between the Indigo Investor and the shareholders of WOW, the shareholders of WOW undertook to procure that certain amendments and waivers are implemented and granted in relation to the Bonds and Warrants, including that all Warrants should be cancelled and delivered.
On 14 December 2018, a Cancellation Agreement was sent to Warrant holders and as of today, all Warrant holders have agreed to and signed the Cancellation Agreement. It is therefore resolved that the Request has been approved.
WOW air hf. – Successful result from the written procedure
Reykjavik, Iceland – January 18, 2019
ISIN: NO – Senior Floating Rate Bonds with an aggregate outstanding amount of USD 60,000,000.
Terms defined in the terms and conditions of the abovementioned bond issue (the "Terms and Conditions") shall have the same meaning when used in this notice, unless otherwise defined herein.
On 14 December 2018, a notice of written procedure (the "Notice of Written Procedure") was sent to the Bondholders regarding a Request (as defined in the Notice of Written Procedure) for amendments of the Terms and Conditions. The voting period expired on 17 January 2019. A sufficient number of votes has been obtained in order to form a quorum and a requisite majority of the Bondholders have given their consent to the Request. It is therefore resolved that the Request has been approved.
Clarifications regarding the Notice of Written Procedure
Reykjavik, Iceland – January 9, 2019
The following letter has been sent to WOW air´s bondholders.
Reference is made to the market announcement of WOW air (“WOW“), dated 29 November 2018, of the signing of a term sheet for the proposed investment of Indigo Partners LLC ("Indigo Partners")* in WOW air and the Notice of Written Procedure sent to bondholders dated 14 December 2018.
Following discussions with bondholders over the past weeks, WOW wants to make the following clarifications regarding the investment and conditions related to the WOW bonds and warrants.
Should the investment be completed as planned, the actual investment amount will depend on the capital needs of the business through the turn-around of WOW. Indigo Partners intends to, and their interests are also aligned to, adequately capitalize WOW through the turn-around as they have done before with other successful aviation investments they have made. Indigo Partners has repeatedly demonstrated that they are long-term and patient investors, for example with their investments in Wizz air (14 years), Volaris (8 years) and Frontier Airlines (5 years).
When concluded, the investment will primarily be in the form of a convertible loan with a 10-year maturity, whereby annual interest will be, at Indigo Partners’ election, payable in kind or in cash on an annual basis. The principal and all accrued interest will be payable at the loan’s maturity. The initial shareholding of Indigo Partners will be 49%. Subject to foreign ownership regulations, Indigo Partners could obtain additional equity should the conversion option be exercised during the tenor of the loan.
The treatment of the outstanding subordinated loan from the current shareholder is under discussion and may be converted into equity before the investment by Indigo Partners or remain in place. If it remains in place, it will continue to be junior to the bonds and will be restructured so there will be no cash flow during the period the WOW bonds are outstanding.
The proposed carve-out from restricted payments for an up to USD 1.5m annual consulting fee relates to a potential fee payable to Indigo Partners and/or their affiliates for potential advisory services. Other restrictions on payments to shareholders, including dividend restrictions, remain as described in the terms and conditions of the bond prospectus.
As highlighted in the Notice of Written Procedure it is a firm condition for the transaction to be completed that in addition to the required changes in the bond terms and conditions, that all outstanding warrants are cancelled. There is therefore no option of a partial cancellation of the warrants.
It is the assessment of WOW that accepting these changes is in the best long term interests of bond holders, WOWs employees, vendors and other stakeholders.
On behalf of WOW,
Skuli Mogensen
*For more information about Indigo Partners, see its most recent filings with the US Securities and Exchange Commission: https://www.adviserinfo.sec.gov/Firm/163648
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 14:15 GMT on January 9, 2019.
Ragnhildur Geirsdóttir leaves her position as WOW air‘s COO to join RB as CEO
Reykjavik, Iceland – January 4, 2019
Ragnhildur Geirsdóttir, who has been WOW air’s COO for the last 18 months is taking over a new position as CEO of RB, Reiknistofa Bankanna, later this month. Skuli Mogensen, WOW air’s CEO, will take over the day to day responsibilities as before.
WOW air sells four aircraft to Air Canada
Reykjavik, Iceland – December 21, 2018
WOW air has signed a sale and purchase agreement to sell Air Canada four Airbus A321 aircraft that WOW air has had on finance lease since 2014. The board of directors of WOW air has approved of this transaction. The sale is a part of WOW air ongoing restructuring and to ensure the maximum utilization of its remaining fleet. The aircraft will be delivered in January 2019. This transaction that will improve WOW air's liquidity by more than 12 million USD.
WOW air announces UK route update
Reykjavik, Iceland – December 20, 2018
Ultra-low-cost airline to shift daily flights from London Gatwick to London Stansted
Ultra-low-cost airline WOW air has today announced that it will be moving its London Gatwick service across to London Stansted, effective 31 March 2019.
The new schedule from London Stansted will see daily flights to Keflavik depart at 11:20, allowing passengers to make onward connections to the US and Canada.
Mats Sigurdson, London Stansted Aviation Director, said: “We’re delighted that WOW air has chosen to base its London operation at London Stansted Airport. We saw really high demand over the summer from passengers choosing WOW’s flights to Reykjavik and beyond to destinations across the United States, and inbound tourism to London and the East of England. We look forward to welcoming more WOW air passengers to London Stansted Airport early next year.”
In addition, to further expand its UK market, the airline will be reintroducing its Edinburgh-Keflavik route following a seasonal pause, with flights commencing in June 2019. Flights will operate three times per week, also ensuring time for transatlantic connections.
WOW air’s London Gatwick schedule will remain unchanged until 31 March 2019.
WOW air hf. – Notice of a written procedure
Reykjavik, Iceland – December 14, 2018
As announced in a press release dated November 29, 2018 the shareholders of WOW air hf ("WOW" or the "Company") and Indigo Partners LLC ("Indigo") have agreed in principle for Indigo to invest in WOW after the signing of a Term Sheet (“Term Sheet”). The Term Sheet contains certain conditions for the completion of the transaction, including that certain amendments and waiver shall be made in relation to the terms and conditions for the Company’s up to up to EUR 100,000,000 Senior Secured Floating Rate Bonds 2018/2021 with ISIN: NO (the "Bonds").
Following successful completion of due diligence, the parties will work to close the investment as soon as practicable whereby Indigo Partners will acquire some of the shares in WOW (the "Purchase") pursuant to a Share Purchase Agreement (the "Share Purchase Agreement") to be entered into between an SPV formed and controlled by Indigo Partners (the "Indigo Investor") and other shareholders of WOW. Additionally, the Indigo Investor contemplates issuing a new super senior convertible loan to WOW to fund the recovery of its business. In the aggregate, Indigo’s investment, assuming successful diligence, structuring and documentation would be for an amount up to USD 75 million.
The Company has on the date hereof given instructions to Nordic Trustee & Agency AB (publ), being the agent under the Bonds, to initiate a written procedure in order to request that the bondholders (i) consent to the release of the security over the shares in the Company, (ii) approve certain amendments of the terms and conditions as further set out in the notice of written procedure, and (iii) waive all defaults under the Bonds. Any consent given by the bondholders to the abovementioned request will lapse and be deemed void if the Purchase has not been completed by 28 February 2019.
On 2 November 2018, the Company issued share warrant instruments (the "Warrants"). It is a condition for the completion of the Purchase that the Warrants are cancelled and the Company does therefore intend to offer the warrant holders to cancel their warrants.
The agent will dispatch the notice to the written procedure to all bondholders on 14 December 2018 in accordance with the terms and conditions of the Bonds. The written procedure will end at 17:00 (CEST) on 17 January 2019. The record date on which a bondholder must own Bonds in order to be eligible to vote in the written procedure will be 20 December 2018.
The notice of the written procedure will be available on the Company's website (https://wowair.is/investors/) and on Stamdata (www.stamdata.com).
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 14:05 GMT on December 14, 2018.
WOW air is restructuring and going back to its roots
Reykjavik, Iceland – December 13, 2018
After a challenging year, WOW air is now restructuring and simplifying its operations to return to its roots as a profitable ultra-low cost airline while discussions with Indigo Partners progress.
WOW air's fleet will be reduced from twenty to eleven aircraft, all single-aisle Airbus. WOW air is in negotiations with its lessors to return some of its aircraft including all Airbus A330s. Four Airbus A321s are being sold in a transaction that will improve WOW air's liquidity by more than 10 million USD.
There will no changes in the schedule in December and early January. In January 2019, WOW air will implement a new flight schedule. WOW air will contact passengers affected by these changes.
Considering this smaller operation, a reduction in WOW air’s workforce is unfortunately inevitable. Today, 111 permanent employees were laid off across the airline. Contractors and short term staff will not be renewed for the time being. WOW air hopes to be able to offer affected employees a future employment opportunity when WOW air starts growing again.
“This is the most difficult day in the history of WOW air. We have dedicated people who have worked hard to make WOW air a reality and it breaks my heart to downsize the company. However, in order to ensure our future and preserve WOW air in the long run, we unfortunately must take these drastic measures“ says Skuli Mogensen CEO and founder of WOW air.
After this restructuring, about one thousand employees will remain with WOW air.
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 11:00 GMT on December 13, 2018.
Indigo Partners and WOW air Discussions Progressing
Reykjavik, Iceland – December 5, 2018
Indigo Partners (“Indigo”) and WOW air (“WOW”) initiated diligence meetings this week in Reykjavik as the initial steps to a potential Indigo investment after the signing a term sheet last week. A team from Indigo Partners spent the last two days with WOW air management to review the business and opportunities of the airline going forward.
The overall process is progressing and both parties are working to finalize the investment. Issues remaining include WOW’s planned network development, vendor contracts including aircraft leases and certain waivers from WOW air´s bondholders.
“These have been two very good days with detailed discussions around WOW current business and how we would envision it going forward. WOW air has a dedicated team and a strong brand that has significant potential,” said Bill Franke, Managing Partner of Indigo Partners.
“We are very pleased with the visit from Indigo Partners and it´s clear that we can learn a lot from Bill Franke and his team on how to build a successful low cost airline. I don’t think we can find a better and more experienced partner to bring WOW air to the next level” said Skuli Mogensen, CEO and founder of WOW air.
WOW is advised in this transaction by Plane View Partners LLC, the U.S. air transportation advisory firm.
About Indigo Partners
Indigo Partners is a private equity firm established by W. A. Franke in 2003 to pursue acquisitions and strategic investments in the air transportation and related industries. The firm was a lead investor in Tiger Airways based in Singapore and Spirit Airlines based in Ft. Lauderdale, Florida, and maintains lead investments in Wizz Air Holdings, Plc, a ULCC with multiple bases in Central and Eastern Europe; Frontier Airlines, a ULCC based in Denver; Volaris Airlines, a ULCC based in Mexico City; and JetSMART, a ULCC based in Chile. Indigo is headquartered in Phoenix, Arizona.
About WOW air
WOW air is a happy low-fare, long-haul airline based in Iceland with a young, low emission fleet. The airline was founded in November 2011 and currently serves 25 destinations across Europe and North America. WOW air is committed to providing the cheapest flights to and from Iceland and across the Atlantic while providing a memorable service all the way. For more information, please visit https://wowair.us/about-us.
Nine months 2018 results
Revenues for the period January to September 2018 were USD 501 million and increased by 31% as compared to the same period last year. Total loss for the period was USD 33.6 million compared to USD 13.5 million loss for the same period last year.
- Loss for the period USD 33.6 million
- EBITDA USD -18.9 million, as compared to USD 8.8 million last year
- Equity ratio 7% at the end of September
The Board of Directors and the Chief Executive Officer draw attention to notes 3 and 11 that accompany these financial statements which contain information on events after the reporting period and the group‘s continued going concern.
On 24 September 2018, WOW air hf issued senior secured floating rate bonds on the Nordic bond market in an amount of EUR 60 million within a total framework of EUR 100 million. Since the date of the bond issue, a number of external and internal events have worsened significantly and the company is now working on securing its long term funding.
During and following the bond issue, the company received negative publicity about the financial health of the company which ended up having a more negative impact on the company's sales, credit position and cash flows than anticipated.
Fuel prices continued to increase in the weeks and months after the bond issue putting further pressure on the company's financial outlook. As a result, management has diligently been working to raise additional funding and working with interested investors and now has agreed in principle for Indigo Partners LLC to invest in WOW air, contingent on the successful completion of due diligence.
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 20:45 GMT on November 30, 2018.
Written procedure cancelled
As announced in a press release dated 29 November 2018 the acquisition of Icelandair Group of WOW air (The “Acquisition”), based on a purchase agreement signed on November 5th, has been cancelled. The share purchase agreement contained certain conditions for the completion of the acquisition, including that certain amendments and waivers should be made in relation to the terms and conditions for the Company's up to EUR 100,000,000 Senior Secured Floating Rate Bonds 2018/2021 with ISIN: NO (the "Bonds"). On the 9th of November WOW air initiated a written procedure where bondholders were requested to approve to the amendments to the terms and conditions of the Bonds.
Whereas the Acquisition has been cancelled WOW air has cancelled the written procedure. Already received votes are considered null and void.
Indigo Partners and WOW air Reach Preliminary Agreement
Indigo Partners LLC (“Indigo”), and WOW air (“WOW”), the Icelandic airline based in Reykjavik, have agreed in principle for Indigo to invest in WOW. Terms of the transaction were not disclosed. Following successful completion of due diligence, the parties would work to close as soon as practicable. WOW’s CEO and primary shareholder, Skuli Mogensen, would remain a principal investor in WOW upon completion of the transaction.
WOW air is an ultra-low-cost carrier currently serving 25 destinations across Europe and North America.
“The demand for low-cost air service continues to expand rapidly worldwide, and with Indigo as a partner, we hope to take full advantage of this highly attractive market segment,” said Mr. Mogensen. "I am excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers."
“Skuli and WOW’s management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand,” said Bill Franke, Managing Partner of Indigo Partners. “We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”
WOW is advised in this transaction by Plane View Partners LLC, the U.S. air transportation advisory firm.
About Indigo Partners
Indigo Partners is a private equity firm established by W. A. Franke in 2003 to pursue acquisitions and strategic investments in the air transportation and related industries. The firm was a lead investor in Tiger Airways based in Singapore and Spirit Airlines based in Ft. Lauderdale, Florida, and maintains lead investments in Wizz Air Holdings, Plc, a ULCC with multiple bases in Central and Eastern Europe; Frontier Airlines, a ULCC based in Denver; Volaris Airlines, a ULCC based in Mexico City; and JetSMART, a ULCC based in Chile. Indigo is headquartered in Phoenix, Arizona.
About WOW air
WOW air is a happy low-fare, long-haul airline based in Iceland with a young, low emission fleet. The airline was founded in November 2011 and currently serves 25 destinations across Europe and North America. WOW air is committed to providing the cheapest flights to and from Iceland and across the Atlantic while providing a memorable service all the way. For more information, please visit https://wowair.us/about-us.
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 21:45 GMT on November 29, 2018.
Icelandair Group's acquisition of WOW air cancelled
The acquisition of Icelandair Group of WOW air, based on a purchase agreement signed on November 5th, has been cancelled. Both parties agree on this outcome.
Icelandair Group hf. issued a stock exchange release last Monday, November 26th, stating that the company estimated that it would be unlikely that all of the conditions in the share purchase agreement would be fulfilled by the shareholders’ meeting on November 30th. That situation remains unchanged. Therefore, it is unlikely that the Board of Directors of Icelandair Group can recommend to the shareholders that they agree to the purchase agreement. Furthermore, the Board does not intend to submit to the shareholders’ meeting a proposal to postpone decision-making on the purchase agreement.
Due to this this situation, both parties agree to abandon the aforementioned purchase agreement.
Icelandair Group will hold its shareholders’ meeting on Friday, November 30, as previously announced. An authorisation proposal for the Board to increase the share capital of Icelandair Group is on the agenda of the shareholders’ meeting.
Bogi Nils Bogason, Interim President & CEO of Icelandair Group:
"The planned acquisition of Icelandair Group of WOW air will not go through. The Board of Directors and management of both companies have worked on this project in earnest. This conclusion is certainly disappointing. We want to thank WOW air‘s management for a good cooperation in the project during recent weeks . All our best wishes go out to the owners and staff of the WOW air. "
Skúli Mogensen, CEO and Founder of WOW air:
"It was clear at the outset that it was an ambitious task to complete all the conditions of the share purchase agreement in this short period. We thank the Icelandair Group's management team for this challenging project, and also wish the management and staff of Icelandair Group all the best."
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 09:00 GMT on November 29, 2018.
WOW air downsizes its fleet by four aircraft
WOW air is downsizing its fleet by two Airbus A320 aircraft and two Airbus A330 aircraft in cooperation with its lessors. This is a part of necessary restructuring of the airline and to ensure maximum utility of its remaining fleet. This restructuring will not impact WOW air´s current plans to fly to India.
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 16:15 GMT on November 27, 2018.
WOW air hf. publishes weakened financial projections and information on decrease of sales and liquidity concerns
Press release issued by WOW air hf.
November 27, 2018
On 24 September 2018, WOW air hf. (the "Company") issued senior secured floating rate bonds on the Nordic bond market in an amount of EUR 60 million within a total framework of EUR 100 million. The bonds carry a floating rate interest of EURIBOR plus 9.00 per cent per annum and mature on 24 September 2021 (the "Bond Issue").
Since the date of the Bond Issue, a number of external and internal events have worsened significantly and the Company is now working on securing its long term funding.
During and following the Bond Issue, the Company had significant bad publicity about the financial health of the Company which ended up having a more negative impact on the Company's sales and credit position than anticipated. As a result, the Q4 results are materially worse than originally anticipated.
Secondly when Primera air collapsed in October the negativity escalated which has further worsened an already challenged situation. The Company was until recently making progress with finalizing a sale lease back agreement which has since been cancelled resulting in USD 25 million less inflow than originally planned.
Thirdly and due to the continuous negative events, all the Company's lessors, creditors and authorities have been monitoring the situation even closer and demanded stricter payment terms then before further putting pressure on the Company's cash flow.
Last but not least oil surged to new heights in the weeks and months after the bond issue which at that time also put pressure on the Company's financial outlook. While this has since retreated the impact on the Company's position during these weeks has not recovered accordingly.
With the above in mind 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.
This information is information that WOW air hf. is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 12:00 GMT on November 27, 2018.
WOW air hf. – Notice of a written procedure
As announced by Icelandair Group hf. ("Icelandair") in a press release dated 5 November 2018, Icelandair has entered into a share purchase agreement to purchase all shares in WOW air hf. (the "Company"). The share purchase agreement contains certain conditions for the completion of the acquisition (the "Acquisition") that will need to be satisfied before the end of November 2018, including that certain amendments and waiver shall be made in relation to the terms and conditions for the Company's up to up to EUR 100,000,000 Senior Secured Floating Rate Bonds 2018/2021 with ISIN: NO (the "Bonds").
The Company has on the date hereof given instructions to Nordic Trustee & Agency AB (publ), being the agent under the Bonds, to initiate a written procedure in order to request that the bondholders (i) consent to the release of the security over the shares in the Company, (ii) approve certain amendments of the terms and conditions as further set out in the notice of written procedure, and (iii) waive all defaults under the Bonds caused by the Acquisition. Any consent given by the bondholders to the abovementioned request will lapse and be deemed void if the Acquisition has not been completed by 31 December 2018.
On 2 November 2018, the Company issued share warrant instruments (the "Warrants"). It is a condition for the completion of the Acquisition that the Warrants are cancelled and the Company does therefore intend to offer the warrantholders to cancel their warrants. In return, the Company will on the final maturity date repay the Bonds at a price equal to 120 per cent. of the nominal amount of the Bonds as further set out in the notice of written procedure.
The agent will dispatch the notice to the written procedure to all bondholders on 9 November 2018 in accordance with the terms and conditions of the Bonds. The written procedure will end at 17:00 (CEST) on 6 December 2018.
The notice to the written procedure will be available on the Company's website (https://wowair.is/investors/media/) and on Stamdata (www.stamdata.com).
For further information, please contact:
[Bjarki Már Baxter, General Counsel Legal]
WOW air´s financing is over
18. 09. 2018
WOW air´s bond issue closed today, 18. September. The size of the bond is 60 million Euros, of which 50 million Euros that has already been sold and 10 million Euros that will be sold to investors in the months to come.
Pareto Securities has on behalf of WOW air overseen the bond offering along with Artica Finance. The bonds will be issued electronically in Værdipapirsentralen ASA, Norway and will be registered in Nasdaq, Stockholm. Participants were both Icelandic and foreign investors.
WOW air has also hired Arion bank and Arctica Finance to start preparations for registration of WOW air´s stocks within 12-18 months.
„We are grateful for the overwhelming support the company has received through this process and to those who participated in the offering. The positive outcome is a great motivation to continue to do our job and strengthen further the travel industry,“ says Skuli Mogensen CEO and owner of WOW air.
Pareto Securities has sent the following information to investors:
*** WOW air - New Bond Issue - Book is closed ***
- Tenor…………………3yrs
- Issue Size……………EUR 60mm
- Coupon………………3m Euribor +9% (Euribor floor at zero) + warrants
Allocations will be out this evening