Cash-strapped Iceland low-cost carrier Wow Air bondholders have approved the conversion of their debt to equity only days after two potential investors pulled out of talks.
This follows the announcement on 24 March by the airline when it said it was in advanced discussions with bondholders about voluntary restructuring including an agreement of converting current debt into equity.
Wow Air said: “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 last seven days have been quite chaotic for Wow Air as it seeks to sort it finances out, and get new investment and save it from possible liquidation.
Icelandair Group ended discussions on 24 March over a potential merger with the low-cost carrier after entering talks with Wow Air on 20 March while another potential investor Indigo Partners pulled out of investment negotiations on 19 March.
Cash-strapped Wow announced in November last year that it was originally in talks with Icelandair Group over merging which then broke down as pre-conditions for a shareholders’ meeting on the acquisition were not met.
Late last year, Wow returned four aircraft to lessors and revealed it was seeking urgent funding to keep it afloat. It now only operates Airbus A320s.