PLAY (Iceland) (OG, Reykjavik Keflavik) has raised ISK 2.4 billion Icelandic króna (USD20 million) via convertible bonds priced at 17.5% after two executives withdrew their offer to acquire all shares in the company and delist it from Nasdaq Iceland.
BBL 212 hf., the investment newco of chief executive officer, Einar Örn Ólafsson, and board vice-chairperson, Elías Skúli Skúlason, withdrew its takeover bid over shareholders' opposition to the delisting of the carrier. The two executives, who proposed to acquire a 100% stake in the airline for around USD20 million, said that the business plan of the airline remained unaffected by the dropped bid.
"The plans and future vision of the takeover group have been well received by the company’s shareholders. However, after discussions with shareholders, it has become clear that many are in favour of PLAY remaining listed on the Main Market [of Nasdaq Iceland]. In light of this, the takeover group has decided to withdraw its plans to make a voluntary takeover offer for the company's shares but will continue to support the company in the journey ahead, which is backed by strong shareholder consensus," BBL 212 said in a statement.
Instead of the takeover, the airline secured commitments for the two-year convertible bonds with a fixed interest rate of 17.5%. Bondholders will have the option to convert the bonds into shares at an exchange rate of ISK1 (USD0.008). Alongside the transaction, the bondholders will acquire purchase rights to a 30% stake in Maltese subsidiary PLAY Europe (FPE, Malta International).
The bonds will be issued once the company secures the necessary corporate approvals.
The new financing will support PLAY's new business model, which foresees the end of all hub operations via Reykjavik Keflavik later this year, focus on leisure services from Iceland, and the growth of the ACMI-out business. The airline plans to surrender its Icelandic air operator's certificate (AOC) and focus on the Maltese one.
