Copenhagen, May 4 (AP) A majority of shareholders in low-cost carrier Norwegian Air Shuttle approved Monday a plan to rescue the company by swapping their equity for debt, in a move required to get state loan guarantees.

Chairman Niels Smedegaard called it it “a historical day” and said it led to “the birth of a new Norwegian.”

More than 96 per cent of the shareholders approved the swap, which effectively wipes out their shares but can ensure the company's survival.

The Oslo-based airline has in recent years offered cheap flights inside Europe and to the United States and has been hit hard by the virus outbreak. Mondays's vote means it will likely access some of the Norwegian government's loan guarantees worth 3 billion kroner (USD 290 million).

The company said it will secure the necessary headroom to pursue further guarantees from the Norwegian Government.

Most of Norwegian Air's fleet is grounded and operations have been reduced to a minimum.

At a first stage, it will primarily operate domestically in Norway and Sweden and between the Nordic capitals “to deliver on its corporate responsibility of maintaining critical infrastructure so that people and necessary goods and medical supplies can be transported during this unprecedented crisis.”

In order to reduce cost, Norwegian has temporarily laid off approximately 90 per cent of its workforce and will continue to implement additional cost measures going forward.

Last month, four of the airline's Danish and Swedish subsidiaries filed for bankruptcy. (AP)

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