Friday, 11 January 2019

Indigo to rescue WOW for $75 million

Indigo Partners,  the power behind airlines such as Wizz air and Volaris is coming to the rescue of WOW air after months of uncertainty for the Icelandic budget carrier.

Many routes had been axed, some aircraft sold, staff sacked as the debts mounted for the small carrier, however  Indigo, after tough negotiations will be investing around $75million into WOW. Indigo Partners intends to, and their interests are also aligned to, adequately capitalize WOW through the turn-around as they have done before with other successful aviation businesses. 

The investment will primarily be in the form of a loan with a 10-year maturity and the initial shareholding of Indigo Partners will be 49%. Subject to foreign ownership regulations, Indigo Partners could obtain additional equity should the conversion option be exercised during the period of the loan, WOW's boss Skuli Mogensen explained in a letter to the airlines' other investors. WOW will make payments for and up to $1.5m each year to Indigo for potential advisory services.