SAS Restructuring Agreement
Scandinavian airline SAS has announced a significant development in its ongoing restructuring efforts. The company secured an investment agreement worth $1.2 billion with a consortium led by Castlelake, Air France-KLM, Lind Invest ApS, and the Danish state. This investment aims to provide the essential support as SAS strives to exit voluntary restructuring proceedings.
Replacing Previous Financing
The $1.2 billion investment replaces the previous debtor-in-possession financing that was provided by Apollo Global Management. This new agreement demonstrates a commitment from a group of investors to aid SAS in overcoming its financial challenges.
The consortium, including Castlelake and Air France-KLM, raised their proposed investment by $25.26 million, further strengthening SAS’s financial position. Castlelake is expected to hold around 32% of the airline, with Air France-KLM at approximately 20% and the Danish state holding about 26%.
Refinancing and Liquidity
SAS will use the airline’s credit agreement of $505.25 million with Castlelake to refinance existing loans, improve liquidity, and facilitate its exit from voluntary restructuring proceedings. This strategic move aims to place SAS on a more stable financial footing.
Seeking U.S. Court Approval
SAS’s CEO, Anko van der Werff, expressed the importance of this investment agreement in the Chapter 11 process in the U.S. SAS is now focused on obtaining U.S. Court approval for the investment agreement and the new debtor-in-possession financing, with this process targeted for November.
SAS, the largest carrier in Scandinavia, faced severe financial difficulties, exacerbated by the COVID-19 pandemic. These challenges led to the company filing for bankruptcy protection in the United States in mid-2022. However, with this substantial investment, SAS is taking significant steps toward financial recovery and stability.
This agreement marks a critical turning point in SAS’s ongoing efforts to overcome financial difficulties and secure its future in the airline industry. The support from a consortium of investors reflects a vote of confidence in the airline’s potential for recovery.