SAS Scandinavian Airlines (SK, Copenhagen Kastrup) is a step closer to exiting bankruptcy protection, currently scheduled for August 2024, after the Stockholm District Court approved its reorganisation plan in Sweden.

The company's Swedish reorganisation is part of the overall turnaround plan approved during SAS's Chapter 11 process in the United States and is a condition precedent for the plan to become effective. Although the timetable may change, SAS anticipates emerging from restructuring in August, which will be contingent on fulfilling all necessary conditions, including regulatory approvals. There is also a three-week appeal period before the court's decision enters into legal force.

As part of the Swedish reorganisation, all of the company's existing common shares and listed commercial hybrid bonds will be redeemed and cancelled. Against this background, the company has applied for the delisting of its existing common shares from Nasdaq Stockholm, Nasdaq Copenhagen, and Oslo Børs, and the delisting of its commercial hybrid bonds from Nasdaq Stockholm, pending the legal force of the reorganisation plan.

The plan also includes changes to SAS's capital structure through:

  • the issuance of new unlisted shares to the new owner consortium, including Castlelake (on behalf of certain funds or affiliates), Air France-KLM, Lind Invest ApS, the Danish state, and certain general unsecured creditors who will receive new shares on account of their claims, resulting in a share capital increase of up to USD550 million;
  • the redemption and cancellation of all of the company's existing common shares without consideration to the shareholders, entailing a share capital reduction equal to the entire current registered share capital of SEK8.6 billion kroner (USD800 million);
  • a bonus issue without issuing shares, entailing a share capital increase of SEK4.5 billion (USD418 million).

In addition to the company's share capital changes, the new owners will invest USD725 million in exchange for new secured convertible debt.

The recovery to general unsecured creditors will be distributed in cash and/or new unlisted shares in the company and through contingent value notes (CVNs). Holders of commercial hybrid bonds, as of July 26, 2024, will be entitled to receive a distribution under the reorganisation plan.

SAS's restructuring plan has already been approved by the European Commission and the US Bankruptcy Court in New York. The airline filed for voluntary Chapter 11 bankruptcy protection in 2022 to expedite its business transformation strategy.