Stakeholders are expected to vote on SAS Scandinavian Airlines' reorganisation in Sweden in the week commencing July 15 according to an announcement by parent company SAS AB. The successful Swedish reorganisation is a condition precedent for the airline's expected exit from US Chapter 11 bankruptcy protection by mid-2024.
"SAS intends to complete the restructuring proceedings in Sweden and the US and fulfil all remaining conditions for the transaction as soon as possible. SAS aims for this to occur during the summer of 2024, but this timetable may change," the parent group said in a statement.
SAS AB said the reorganisation plan in Sweden was distributed to affected parties on June 10, and the company intends to request the Stockholm District Court to open plan proceedings shortly. By Swedish law, the plan hearing, during which affected parties can vote on the reorganisation plan, must take place between three and five weeks after the court opens the plan's proceedings. "The company anticipates that the plan hearing will take place around the week commencing July 15, 2024. The exact date of the hearing will, however, be decided by the court," SAS AB said.
The company applied for reorganisation in Sweden on March 27, 2024, and the court approved the application on the same day. This approval was confirmed at a creditors' meeting on April 17, 2024.
The Reorganisation Plan includes:
- A debt settlement proposal that aligns with SAS's Chapter 11 plan in the US. It proposes that general unsecured creditors, including holders of listed commercial hybrid bonds, will receive a modest recovery. Subordinated unsecured creditors will receive no recovery, and existing shareholders will receive no value. The final recovery levels for general unsecured creditors may change based on factors such as fluctuations in the SEK/USD exchange rate, potential changes in the eligible creditor base and their claim amounts, and the final decision regarding SAS's obligation to pay interest on state aid received during the 2020 recapitalisation:
- Issuance of new unlisted shares to new investors Castlelake on behalf of certain funds or affiliates, Air France-KLM, Lind Invest, and the Danish state, and certain unsecured creditors who will receive new shares on account of their claims;
- Redemption and cancellation of all existing common shares without compensation;
- A bonus issue without issuing new shares; and
- Required changes to the company's articles of association.
SAS voluntarily initiated Chapter 11 to expedite its business transformation strategy, SAS Forward. This led to a new owner-consortium comprising Castlelake, Air France-KLM, Lind Invest, and the Danish state investing USD1.2 billion in the reorganised airline, with USD475 million in new unlisted equity and USD725 million in secured convertible debt. The exit plan was supported by 99% of creditors. Additionally, SAS renegotiated leases with 15 lessors for 59 aircraft.