* Stock falls as much as 15 pct to 6.5 year low (Recasts with share price for rights issue)
By Terje Solsvik
OSLO, Feb 18 (Reuters) - Norwegian Air will sell new shares at just a third of the current market price when the loss-making airline seeks to raise money from its owners in the next few weeks, it said on Monday.
Norwegian Air said on Jan. 29 it planned to raise 3 billion Norwegian crowns ($348 million) in a share sale to bolster its finances, just days after British Airways owner IAG ruled out a bid for the budget airline.
Norwegian is trying to replicate on transatlantic flights the low-cost model that dominates the short-haul market via companies such as Ryanair and easyJet, but is struggling to make the business profitable.
The European airline sector is struggling with over-capacity and high fuel costs, with several companies going out of business, the latest being British budget airline Flybmi, which filed for bankruptcy on Sunday.
In the rights issue, Norwegian's shareholders will get two subscription rights to buy shares for every share they currently own, and new shares will be sold at 33 crowns each, compared with Friday's closing price of 97.34 crowns.
By selling new shares far below the current market price, Norwegian will boost the value of each of the purchasing rights, which can in turn be bought and sold.
The company's shares fell as much as 15 percent to a six-and-a-half year low of 83 crowns on Monday, before paring losses to trade down 8.8 percent at 88.8 crowns by 1300 GMT, valuing the business at about 4 billion crowns.
"Based on the (Friday) closing price, the theoretical value of each subscription right is NOK 21.45 and the theoretical value of the two subscription rights received per existing share is NOK 42.90," Norwegian said in a statement.
"Shareholders must decide whether to exercise or sell their subscription rights, or a combination thereof, to maintain the full value of the shareholding," it added.
Earlier on Monday, Norwegian's chief executive and the board chairman said they would sell some of their subscription rights to other investors, in a move that would reduce the 24.66 percent stake they currently hold in the airline.
"HBK has agreed to sell the subscription rights at a price of 70 percent of the theoretical value of the subscription rights at the time of pricing of the rights issue," HBK - the vehicle through which the chairman, CEO and their families own their stake - said in a statement.
It did not say who would buy those rights.
Norwegian said last month that billionaire investor John Fredriksen was among those who had agreed to take part in its share issue.
($1 = 8.6273 Norwegian crowns) (Additional reporting by Gwladys Fouche; Editing by Kirsten Donovan and Mark Potter)