Shares in Norwegian Air crashed this morning after the struggling airline’s boss and board chairman agreed to sell some of their subscription rights to a share issue at less than face value in order to raise emergency funds.
Chief executive Bjorn Kjos and chairman Bjorn Halvor Kise agreed to sell their subscription rights at around a 30 per cent discount, even though it will dilute their 24.66 per cent stake held through their holding vehicle, HBK Holding.
Shares plunged almost 11 per cent on the Oslo Bors in afternoon trading.
Kjos and Kise will make the move if the rights issue is approved at an extraordinary general meeting tomorrow.
Buyers of the shares, who have not been named, have allegedly committed to a total investment of 500m Norwegian kroner (£44m), including the purchase of the discounted subscription rights.
The company saw shares slump 15 per cent after announcing an emergency fundraising of 3bn Norwegian kroner late last month, just days after IAG, which owns British Airways, ruled out a takeover.
Norwegian Air is the latest in a string of European budget airlines feeling the heat as they struggle to make their businesses profitable as a result of fierce competition and rising fuel costs.
British airline Flybmi filed for bankruptcy on Sunday, cancelling all its scheduled flights, while fellow struggler Flybe warned it was on the verge of bankruptcy in January as investors threatened to revolt over a bid from a consortium including Virgin Atlantic.
Read more: Norwegian air passenger growth flags
Earlier this month, Berlin-based Germania announced it would be closing its doors.
Norwegian is aiming to cut costs by £180m this year and reorganise its bases and route network.