Nov 30 (Reuters) - U.S.-based private equity fund Indigo Partners said late on Thursday it had agreed to invest in low-cost carrier WOW air one day after Icelandair scrapped its plan to buy the privately-held airline.
“We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.” Bill Franke, managing Partner of Indigo Partners said in a statement.
The private equity firm managed by Franke, the veteran U.S. low-cost airline investor, also has made investments in U.S.-based Frontier Airlines, Mexico’s Volaris, Chilean carrier JetSmart and Hungary’s Wizz.
The terms of the Wow air transaction were not disclosed.
WOW CEO and primary shareholder, Skuli Mogensen will remain a principal investor in WOW upon completion of transaction.
Wow air has been reducing the size of its fleet and had said its cash flow was under pressure due to stricter terms from creditors and lessors. After the Icelandair deal did not go ahead Wow said it was looking at other opportunities but did not give details.
Icelandair said on Nov. 5 it had agreed to buy its Icelandic rival provided conditions were met by Friday, when its board was expected to recommend the merger to shareholders.
Icelandair said it had cancelled the plan because those terms were unlikely to be achieved by the deadline. It did not say what the conditions were.
Reporting by Tommy Lund. Editing by Jane Merriman