China becomes one of Norwegian’s biggest owners after rescue deal

The aircraft leasing company BOC Aviation, controlled by the Chinese state, has become a major shareholder in Norwegian Air Shuttle as part of the ailing airline's rescue plan, Norwegian said on Wednesday.

Already faced with a substantial debt burden, the low-cost airline ended up in dire financial straits when the new coronavirus pandemic paralysed global air traffic.
In early May, Norwegian adopted a rescue plan, which included a deal with creditors to convert some of the company's financial liabilities into equity.
The plan enabled the company to strengthen its capital position and meet conditions by the Norwegian state to provide guarantees for 2.7 billion Norwegian kroner ($270 million or 247 million euros) in loans, in addition 300
million kroner in loan guarantees already provided.
Leasing companies, from which Norwegian rents part of its aircraft fleet, will take over a significant chunk of the airline's share capital.
Ireland's AerCap Holdings will become the largest shareholder with 15.9 percent of the shares, as well as convertible bonds representing a further 7.2 percent.
BOC Aviation, controlled by the Chinese state through multiple companies, will in turn hold 12.67 percent of the capital.
While welcoming the closure of the deal, Norwegian CEO Jacob Schram cautioned that “the months ahead will remain challenging and with a high degree of uncertainty for the industry.”
“Norwegian will still need to collaborate closely with a number of creditors as the company currently has limited revenues,” Schram said in a statement.
Heavily indebted after an ambitious expansion effort, Norwegian now plans to focus on profitable routes and reduce the number of flights, especially long-haul ones, where the company was a pioneer among low-cost carriers.
The dilution of shares sent the share price tumbling on the Oslo Stock Exchange on Wednesday.
Late morning on Wednesday the share was down 25 percent, bringing the decline for the year to more than 90 percent.

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China derides Copenhagen democracy meet as ‘political farce’

China on Tuesday blasted a democracy conference in Copenhagen attended by Taiwan's president and a Hong Kong activist alongside Danish government officials this week, qualifying it a "political farce".

China derides Copenhagen democracy meet as 'political farce'
Demonstrators gathered outside the Copenhagen Democracy Summit on Tuesday. Photo: Emil Helms/Ritzau Scanpix

The Copenhagen Democracy Summit was held Monday and Tuesday in the Danish capital and organised by the Alliance of Democracies, an organisation targeted by Beijing sanctions in March and founded by former NATO boss Anders Fogh Rasmussen.

In addition to Taiwan’s President Tsai Ing-wen and Hong Kong democracy activist Nathan Law, Danish Foreign Minister Jeppe Kofod also participated in the forum by video link, which Beijing said violated “the one-China principle.”

“This summit is a political farce,” the Chinese embassy in Denmark wrote in a statement published on Tuesday. “Inviting those who advocate Taiwan and Hong Kong ‘independence’ to the meeting violates the one-China principle and interferes in China’s internal affairs,” it said.

“Some hypocritical western politicians are good at meddling in other countries’ internal affairs and creating divisions and confrontation in the name of ‘democracy’ and ‘freedom’. They are bound to fail,” it added.

At the conference on Monday, Kofod said it was “deplorable” that Beijing had imposed sanctions on 10 European individuals and organisations in response to EU sanctions on Xinjiang officials over their actions against the Uyghur Muslim minority.

Like most countries, Denmark applies the one-China principle — under which Beijing bars other countries from having simultaneous diplomatic relations with Taipei — though it does maintain relations with Taiwan.

Cut off politically from the rest of China since the end of the Chinese Civil War in 1949, the territory is self-governing but is not recognised by
the United Nations.

Beijing considers Taiwan a rebel province that will one day return under its control, by force if necessary.

China’s sabre-rattling has increased considerably over the past year, with fighter jets and nuclear-capable bombers breaching Taiwan’s air defence zone on a near-daily basis.

“Our government is fully aware of the threats to regional security, and is actively enhancing our national defence capabilities to protect our
democracy,” Tsai told the conference in a video address on Monday. US President Joe Biden is expected to present his China strategy soon, as
calls mount for him to publicly commit to defending Taiwan militarily in the event of a Chinese attack.