SAS Scandinavian Airlines (SK, Copenhagen Kastrup) wants to sell and lease back six of its A320-200Ns as part of its fleet restructuring under Chapter 11 bankruptcy protection. This follows approval from the US Bankruptcy Court in New York for USD700 million debtor-in-possession (DIP) financing for the Scandinavian flag carrier from US private equity firm Apollo Global Management.
A hearing has been scheduled for September 20 in the New York Bankruptcy Court on a motion by SAS to sell and lease back six A320neo with one or more entities affiliated with Griffin Global Asset Management. The registration details of the aircraft were not disclosed.
However, delivery of the first aircraft is scheduled for September 23, 2022, with three more scheduled for October 2022, one in November 2022, and the sixth in December 2022. The lease term will be 144 months for the first three deliveries and 120 months for the last three. According to the ch-aviation fleets module, SAS's narrow-body fleet includes fifty-two A320neo with another 23 on order.
Meanwhile, the USD700 million DIP financing, along with cash generated from the company's ongoing operations, will enable SAS to continue meeting its obligations while it goes through Chapter 11 restructuring, the airline announced in a statement.
The airline, on August 14, had announced the DIP financing credit agreement and that it aimed to exit Chapter 11 within nine to 12 months. It voluntarily filed for bankruptcy protection in the US on July 5 as a part of its "SAS Forward" transformation plan.
"With the court's approval of our DIP financing, we are making important progress in our Chapter 11 process. The DIP financing agreement with Apollo followed an extensive and competitive process that we conducted to achieve the best financing outcome for SAS, and we are pleased that the court has approved it," stated SAS President and Chief Executive Officer Anko van der Werff.
Through the Chapter 11 process, SAS aims to reach agreements with key stakeholders, restructure its debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection. Its "SAS FORWARD" plan encompasses raising at least SEK9.5 billion krone (USD895 million) in new equity capital as well as reducing or converting more than SEK20 billion (USD1.8 billion) of debt into common equity (of which a majority is on-balance sheet debt), including state hybrid notes, commercial hybrid notes, Swiss bonds, term loans from states, aircraft lease liabilities, maintenance contract obligations, and other executory contract obligations. The new equity raise and debt-to-equity conversions contemplated as part of "SAS FORWARD" will entail substantial dilution to existing shareholders.
