UPDATE 1-Norwegian Air raises $168 mln in share issue at 10 pct discount

(Adds earnings projection, background)

OSLO, March 21 (Reuters) - Norwegian Air has raised 1.3 billion Norwegian crowns ($168.20 million) in a share issue to boost its finances and pay for rapid expansion, and may raise a further 200 million crowns in a subsequent offering, the budget carrier said on Wednesday.

Shares were sold at 155 Norwegian crowns each, a 9.7 percent discount to the last traded share price in Oslo of 171.6 crowns.

Norwegian Air is trying to crack the transatlantic market by undercutting established rivals, but faces pressures to control costs and shore up its balance sheet in the face of stiff competition.

Its fate rests on the still unproven strategy of adapting the success of low-cost short-haul travel to long-haul routes. Shares have fallen 36 percent over the past year, suggesting some investors have doubts.

The company late on Tuesday warned of a wider-than-expected first-quarter loss, and said it would raise cash amid higher oil prices and fluctuating currencies.

The budget airline said first-quarter pretax loss would come in at 2.6 billion crowns, versus a 1.8 billion crown loss in the same period last year.

While the January-March revenue projection of 7.1 billion crowns was almost in line with the 7.24 billion estimated by analysts, according to Thomson Reuters Eikon data, the pretax loss was 550 million crowns bigger than expected, as costs ballooned. ($1 = 7.7290 Norwegian crowns) (Reporting by Terje Solsvik; Editing by Biju Dwarakanath)