Wow Air, struggling to avoid bankruptcy, is now in "advance
discussions" about a financial restructuring arrangement with bondholders
and other creditors.
The aim of the talks is to reach a deal in which creditors
would agree to convert the funds owed to them into equity in the airline.
Two potential investors walked away from Wow last week. On
Thursday, Wow said private equity firm Indigo Partners ended talks that had
been ongoing since November. Indigo is a lead investor in several budget
airlines, including Frontier, Hungary's Wizz Air, Mexico's Volaris and Chile's JetSmart.
In December, Wow said Indigo was contemplating investing up to $75 million.
After Indigo talks ended, Wow briefly returned to the table
with competitor Icealandair, but talks broke down Sunday. Icelandair had previously
nixed a proposed merger with Wow last November.
Wow posted a pre-tax loss of $42 million during the first
nine months of 2018. The carrier's deteriorating finances have already caused
it to reduce its fleet from 24 to 11 aircraft in recent months and to eliminate
all widebody flying. Wow has also shrunk its network, including U.S. flying.
The carrier currently serves just Boston, Newark, Baltimore and Detroit in the
U.S. market, down from 13 destinations last summer.
Wow said that it would provide an update on restructuring
efforts sometime Monday.
Wow's website shows that it had cancelled 22 flights for
Monday as of midday eastern time, including scheduled charter operations.