[ad_1]
Icelandair and Wow Air have now agreed to abandon plans to merge, according to a stock announcement issued by Icelandair on Thursday.
Both companies, but especially Wow Air, have struggled on the difficult aviation market. The initial plan announced in early November was to have Icelandair's Icelandair share purchase purchased from Wow Air.
Overly ambitious plan
Icelandair wrote that she did not think that all the terms of the acquisition plan would have been resolved among its shareholders who should vote in favor of the acquisition at an extraordinary general meeting held on Friday.
"Therefore, it is unlikely that Icelandair's Board of Directors will recommend to Shareholders to vote in favor of the Acquisition Agreement." The Board of Directors does not intend to propose a postponement of the shareholder vote, writes Icelandair.
"The boards of directors and management of both companies have worked on this project with good intentions, and the conclusion is very disappointing.We would like to thank the management of Wow Air for its cooperation," said Bogi Nils Bogason , CEO of Icelandair Group.
"It was clear from the start that it was ambitious to meet all the conditions of the acquisition agreement in such a short time," said Wow Air's chief and founder, Skúli Mogensen.
Airmail in Iceland: Icelandair extinguishes Wow Air with its own shares in payment
Had to return Tuesday
Although Icelandair has experienced a sharp reduction in profits and has had to ask creditors for a temporary debt waiver, Wow Air is in crisis.
In September, the company had raised 60 million euros (584 million NOK at the current rate) in the form of a bond issue with the help of Norwegian broker Pareto, but it now seems that the company has serious financial problems.
The Icelandic company on Tuesday made four flights to the leasing company and lacks at least NOK 165 million in cash, according to Check-In.dk.
Before the announcement of the merger's abandonment, Jacob Pedersen, a Sydbank analyst, told the website that he was surprised that the company's situation has become so dramatic that it it's not difficult to keep it in the air before merging with Icelandair:
"Virtually all parties should have an interest in joining the merger.Creditors are not interested in the bankruptcy of Wow Air," said Pedersen.
Source link
