Cash-strapped Norwegian Air appears on course to secure additional funds after reporting a new share offering has been vastly oversubscribed.

Budget carrier Norwegian offered 400 million shares priced at NOK 1 per share this week and reported applications for 2.8 billion when the offer closed on Thursday, May 14.

MoreNorwegian Air clears latest rescue hurdle

Norwegian Air agrees first stage of lifeline financing

The successful issue should see Norwegian secure NOK400 million (€36 million) in payments next week.

This will add to the NOK3 billion (£240 million) in loans guaranteed by the Norwegian government which the carrier is due to secure next week following agreements with, and a takeover by, aircraft leasing companies and existing bondholders.

The financial restructuring of the airline has eliminated a proportion of the carrier’s debt but wiped out existing shareholders.

Norwegian Air won the support of shareholders in control of 95% of shares to the plans, including a debt-for-equity swap with aircraft lessors and bondholders, in early May.

That left the leasing companies owning 53% of the airline and bondholders 42%, with just 5% shared between existing and new shareholders.

The carrier had warned it would run out of cash by mid-May unless its creditors and shareholders approved the escape plan.

However, the rescue leaves the carrier still heavily in debt, having begun the year with debts in excess of €6 billion.

Norwegian has said most of its fleet will remain grounded for at least a year and be cut by one third once the crisis is over.

The carrier intends to refocus on its most profitable routes, including from London Gatwick.

Norwegian declared four of its Scandinavian subsidiaries bankrupt in April and terminated the contracts of 4,700 pilots and cabin crew, more than 40% of its workforce.

MoreNorwegian Air clears latest rescue hurdle