SAS Scandinavian Airlines (SK, Copenhagen Kastrup) has announced it has completed its restructuring proceedings and emerged from both Chapter 11 bankruptcy protection in the United States and Swedish company reorganisation with an improved capital structure following an exit financing transaction of USD1.2 billion from its new owner consortium.
The company said in a statement on August 28 that the transaction included USD475 million in new unlisted equity and USD725 million in secured convertible debt. The restructuring process also involved reducing over USD2 billion in debt, adjusting the fleet, and reaching stakeholder agreements. SAS's revitalisation further includes a new management team, a renewed focus on operational efficiency, and an upcoming membership of Skyteam.
The new owner consortium, comprising Castlelake, Air France-KLM, Lind Invest ApS, and the Danish state, now effectively holds an aggregate 86.4% stake in the share capital of the reorganised SAS AB, according to a statement issued by Air France-KLM, which confirmed it had acquired a 19.9% share and invested USD144.5 million by subscribing for USD109.5 million of common shares and purchasing USD35 million of senior secured convertible notes.
"Specific provisions have been agreed upon between the members of the consortium, whereby Air France-KLM's stake could be increased such that Air France-KLM may become a controlling shareholder, after a minimum of two years, subject to, among other things, certain regulatory conditions and financial performance," the airline said.
Meanwhile, the new owners have appointed a new ten-member board led by Kåre Schultz - a former executive in the pharmaceuticals industry - who succeeds Carsten Dilling as chairman. Schultz previously served in top positions at Novo Nordisk, Lundbeck, Teva Pharmaceutical Industries, Karo Healthcare, Royal Unibrew, and LEGO Group.
Almost all creditors involved in SAS's restructuring proceedings in the US and Sweden supported the restructuring plans. Distributions to creditors entitled to cash, equity, or contingent value notes are expected to be made within the next month.
The company has reported operational improvements, including its highest-ever monthly profitability in July 2024 and progress towards its goal of reducing annual costs by SEK7.5 billion kronor (USD735 million) under its SAS Forward transformation plan.
"This is a historic day that marks the start of an exciting future for SAS's customers, partners and colleagues. We have successfully completed our restructuring proceedings, and we are now entering a new era," declared president and CEO Anko van der Werff. "Now, we must look ahead and complete the transformation that we have started, continue our commitment to achieving net-zero emissions by 2050, and take advantage of the opportunities in a growing market."
Meanwhile, Air France-KLM and SAS have signed interline and codeshare agreements to connect their hubs and networks. These agreements, which cover reciprocal loyalty programme benefits, will enter into force on September 1, coinciding with SAS joining Skyteam, of which Air France and KLM are founding members.
SAS voluntarily filed for US Chapter 11 bankruptcy in July 2022 after financial woes exacerbated by the Covid-19 pandemic led to a significant decline in profitability. The restructuring involved two main proceedings: Chapter 11 in the US and a company reorganisation in Sweden, which SAS applied for in March 2024. The US Bankruptcy Court in New York approved the restructuring plan in March 2024, while a Swedish court approved the Swedish reorganisation in July 2024. The plan has also been approved by the European Commission.
Parent SAS Group delisted from the Scandinavian stock exchanges Nasdaq Stockholm, Nasdaq Copenhagen, and Oslo Børs on August 14 ahead of its emergence from restructuring.
