The Norwegian Government has become a shareholder in Norwegian Air Shuttle ASA, acquiring a 6.37% equity stake in the airline following a new deal that restructures the state’s convertible loan into shares. The move comes as Norwegian repurchases 50% of the convertible bond initially issued during its 2021 financial reconstruction and converts the remaining portion into equity.
A profitable restructuring deal for the state
The transaction was announced on 12 May 2025 by the Ministry of Trade, Industry and Fisheries (Nærings- og fiskeridepartementet), which confirmed the sale of 50% of its holdings in the perpetual convertible bond issued by Norwegian. In return, the state will receive NOK 862.4 million (€ 74 million) in gross proceeds. The remaining portion of the loan, with a nominal value of NOK 615.8 million (€52.8 million), will be converted into shares.
Norwegian had initially received NOK 1.2 billion (€103 million)in state-backed funding during its 2021 crisis, which was a critical part of the company’s survival amid the pandemic. According to Minister Cecilie Myrseth, the new agreement “maximizes the state’s value and thus the public interest,” while also marking Norwegian’s return to financial stability.
Norwegian initiates the buyback plan
The initiative to repurchase and convert the bond came from Norwegian itself, which stated that it was now in a strong enough position to honor parts of the loan under the original agreement. According to the airline’s CFO Hans-Jørgen Wibstad, the transaction is “very good for Norwegian” and reflects a long-standing and fruitful collaboration with the state.
The buyback offer was extended to all bondholders, with a repurchase price of 140.04% of nominal value, equivalent to a share price of NOK 13.15 (€1.13). This high valuation has been interpreted as a sign of investor confidence in Norwegian’s market recovery.
Government participation aligns with other creditors
The Government’s financial involvement has always followed commercial terms, participating alongside other creditors in the 2021 rescue deal. The Stortinget (Norwegian Parliament) had previously granted the government the authority to reduce or fully exit its involvement in Norwegian, a decision that will be reviewed depending on the company’s and the market’s evolution.
Legal and financial advisory for the deal was provided by Nordea Bank, Pareto Securities, and Wikborg Rein law firm.
Strategic significance for Norway’s aviation sector
This development underscores the strategic role of Norwegian Air Shuttle in maintaining a robust domestic and international air travel network. The state’s shift from lender to shareholder not only strengthens Norwegian’s capital structure but also signals renewed confidence in the carrier’s long-term prospects.
The move also reflects a broader trend of Government involvement in national carriers post-COVID, balancing market interests with public service obligations.
