SAS Group will not have to use the second tranche of its USD700 million debtor-in-possession (DIP) term loan during the second quarter of this year, as it had previously communicated, because of “a stronger than expected development of SAS’s liquidity position during the winter,” it said in a statement.
The announcement followed the SAS Scandinavian Airlines (SK, Copenhagen Kastrup) parent’s revelation days earlier that it had been forced to defer interest payments on its perpetual bonds, which led to media speculation that the company could be delisted from the stock exchange in the near future.
SAS Group entered into an agreement with New York-based private equity firm Apollo Global Management in August 2022 to raise USD700 million in financing in two equal-sized tranches to help it complete its Chapter 11 restructuring process. A delisting would give Apollo majority ownership of SAS, if the term loan is taken in full, as it can be converted into shares.
The US Bankruptcy Court in New York approved the financing in September 2022, whereupon SAS utilised the first tranche.
“SAS has no near-term need for additional liquidity through the second tranche of the DIP term loan,” the airline said in its latest statement on April 17, but “depending on the continued development of SAS’s liquidity position [it will] continue discussions with Apollo Global Management regarding access to the second tranche of the DIP term loan at a later stage during the Chapter 11 process.”
In the meantime, the company said, it will continue to pursue other financing initiatives, a search it embarked on in April, which could supplement its liquidity at a lower cost than a near-term use of the second tranche of the DIP loan.
