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May 21, 2024
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SAS Scandinavian Airlines has received approval from the New York Southern District bankruptcy court to launch the equity solicitation procedure to raise fresh capital. The carrier has been preparing for this step, which is part of the SAS FORWARD restructuring plan under Chapter 11 bankruptcy protection. SAS gets green light to launch equity solicitation procedure.

The New York Court has been supervising SAS’ Chapter 11 since July 5, 2022. Since then, the airline renegotiated collective labor agreements with pilots and cabin crew and contracts with lessors to reduce annual structural costs by SEK 7.5 billion.

The next step is to reduce or convert SEK 20 billion in net debt, which includes state hybrid notes, commercial hybrid notes, Swiss bonds, term loans from states, aircraft lease liabilities, maintenance contract obligations, and other contract obligations. SAS also wants to raise SEK 9.5 billion in new equity capital, but says: “The final amount of equity financing raised will depend upon the competitive equity raise process along with the Company’s ongoing ability to generate additional liquidity.

Solicitation procedure expected to take until mid-August

With today’s approval of the procedure, SAS can start the equity solicitation process which is expected to last until mid-August. Seabury Securities LLC and Skandinaviska Enskilda Banken AB are serving as investment bankers and will contact potential investors. Subject to confidentiality, interested parties will be invited to conduct due diligence through a virtual data room. The Danish State has the right to subscribe for a percentage of the fully diluted new common shares of at least 29.9 but not less than 21.8 percent.

We will conduct a competitive and broad solicitation process to secure equity capital that will help drive our airline forward and facilitate our emergence from the Chapter 11 process,” says CEO Anko van der Werff in a media statement.

author avatar
Richard Schuurman
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016. Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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