US asset manager Apollo Global Management plans to apply for approval from Swedish and Danish regulators to take a majority stake in SAS Scandinavian Airlines (SK, Copenhagen Kastrup) as part of the airline's rescue plan, a well-placed source has told Reuters.
Neither the airline nor Apollo was immediately available for comment.
SAS lost almost 60% of its value after filing for Chapter 11 bankruptcy protection in July 2022, seeking to slash costs and debt after wage talks with pilots collapsed.
A deal with the US private equity giant, which has also invested in US and Mexican airlines, would test European Union rules concerning foreign ownership. In the EU, foreign investment cannot exceed 49 % of the ownership of an EU airline; that is, control must remain in EU hands.
Given that a large part of Apollo's capital originates from Europe-based investors, the fund hopes to get approval for a deal, according to the unnamed source, who declined to be identified because the matter is confidential.
No final decision has yet been made on a possible investment, according to two more sources familiar with the matter who spoke to Reuters. The first source said a deal could be done before the year-end.
Apollo will work with aviation regulators in Sweden and Denmark to secure approval, the first source said. The European Commission would also be involved, but the national regulators would be responsible for giving the go-ahead for a change of ownership.
The move comes as the airline looks for large investors and seeks to raise equity as part of its Chapter 11 bankruptcy plan. It has also secured a USD700 million debtor-in-possession (DIP) loan from Apollo to fund it through the process. The US company could become a major shareholder by converting that loan to equity at the end of the process.
Any deal with Apollo would likely need support from Sweden and Denmark, which each own about 22% of SAS. Private shareholders control the remainder.
Denmark's finance ministry told Reuters it was looking for one or more shareholders to take a majority stake in SAS. Any bailout would require the airline to maintain Copenhagen Kastrup as a key passenger hub, it said.
Sweden has said it won't inject more cash into SAS.
The sources said SAS would maintain its Scandinavian identity, playing down speculation it could get a new hub or be transformed into a low-cost carrier under a new owner.
In 2018, Apollo invested in Sun Country Airlines (SY, Minneapolis St. Paul International) to turn it around, helping it go public in 2021. The company also became the largest shareholder in Aeroméxico (AM, México City International) in 2020 following the Mexican carrier's Chapter 11 bankruptcy proceedings. Those experiences showed it could approach long-term investments flexibly, the sources said.
