Critical Moment for Icelandair

Icelandair Group’s public offering began yesterday morning and will conclude today at 4 pm.

The aim of the share offering is to issue new shares worth a minimum of ISK 20 billion (USD 146 million; EUR 124 million) to ensure the continued operation of the airline, which has been hit hard as a result of the COVID-19 pandemic, Morgunblaðið reports.

Yesterday morning, Icelandair CEO Bogi Nils Bogason went to the podium at an open meeting and presented to potential investors the current state of affairs and reviewed future prospects and what investors could expect.

Although the public offering has been in preparation for a long time, there is little known about potential participants.

Icelandic pension funds are the main stakeholders of Icelandair, and according to Morgunblaðið’s sources, many meetings were held yesterday to discuss the matter. When asked to express themselves about their intentions, however, pension fund directors declined to comment.

Analysts agree than an investment in Icelandair is risky, due to the uncertainty surrounding international airline operations. They do, however, point out that the share price is reasonable and that the investment could prove profitable if all goes well.

If the premises Icelandair presented yesterday prove correct, the annual yield through 2024 could range from 17 to 50 percent.

The result of the public offering, which is managed by Landsbanki and Íslandsbanki, will be made public tomorrow.