Friday, 1 January 2021

It is not just aircraft Icelandair completes sales and lease back deals on..........troubled carrier completes similar deal on its HQ

Finacially troubled Icelandair sells off its headoffice for nearly $18 million to keep flying in 2021.  The Reykjavik based carrier confirmed, that like its Boeing 737 MAX aircraft, it has agreed a sale and lease back arrangement on the building.

The sale will took place on 30 December 2020, for a ISK 2,250 million (USD 17.6 million) price tag.  The Icelandair Group will lease the office building for a period of three years, until year-end 2023. 

According to the airline, proceeds from the sale will be used in part as payment of a loan / mortgaged on the property and to strengthen the liquidity position of the airline, which is still looking incrfedibly stressed ompany. Whilst the sale was higher than the proposed book value of the property, the prolonged uncertainty in the tourism industry, some further impairment on such assets in the company’s balance sheet is expected which will off-set the gain from the sale of the office building. 

"The sale of Nautholsvegur 50 enables Icelandair Group to achieve future cost savings and increase liquidity. Over the next three years, Icelandair intends to build a new office building which will be tailored to needs of the operations and support future flexible working arrangements."  the carrier said in a statement.  

The location of the new headquarters will be at Icelandair’s current facilities at Flugvellir in Hafnarfjordur, which will help the carrier cut costs by combining the operations in Hafnarfjordur and Reykjavik in one location.  

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