OSLO (Reuters) -Loss-making airline Flyr plans to raise up to 530 million Norwegian crowns ($50.73 million) in new equity to alleviate a "very strained financial situation", the Norway-based carrier said on Thursday.
The company, whose rivals include Norwegian Air and SAS, said on Oct. 4 it would implement heavy spending cuts to preserve cash during the winter, including furloughs, and that non-profitable routes were put on hold.
The new shares will be sold at just 0.01 crown each, a 96% discount to Wednesday's closing price, reflecting the company's near-term liquidity needs, challenging capital market conditions and investor feedback, Flyr said.
"By implementing these measures, we will be well positioned to ramp-up with full force for the coming spring and summer," board Chair Erik Braathen said in a statement.
The share issue comes in the form of an institutional offering of 430 million crowns and a further 100 million for other investors.
Braathen's private investment company will invest 10 million crowns in the share issue.
Flyr, which launched its first flight in June 2021, on Thursday reported an operating loss of 231.7 million crowns for the third quarter of 2022 on revenue of 610.4 million crowns.
The company faces a "challenging and unpredictable market going forward," Flyr said in its earnings report.
($1 = 10.4475 Norwegian crowns)
(Reporting by Terje Solsvik, editing by Stine Jacobsen and Kim Coghill)