Indigo Partners has set new terms for its proposed investment in Icelandic airline Wow Air, which has faced months of financial difficulty and was forced to ask lenders for an extra month to negotiate with the US investment company two weeks ago.
The firm had originally proposed to inject $75m over 10 years in return for a 49 per cent stake in the carrier but an agreement could not be reached before the 28 February deadline and so an extension until 29 March was granted.
Indigo is now demanding that the founder and CEO Skuli Mogensen is removed as a shareholder of the company and that part of the bonds are written off, according to Icelandic newspaper Markaorins.
The US investment fund presented the proposal before the 28 February deadline but no agreement was reached, resulting in shareholders asking for an extension.
Read more: Splashdown: Space X capsule returns to earth
The deal would also demand that stakeholders agree to write off parts of the airline's liabilities despite investing 60m last autumn, although they have yet been informed, the reports claim.
Indigo has also reportedly requested that Mogensen's stake is reduced to a "negligible" amount, which prompted the founder to approach Icelandair Group for investment again, but he was turned down.