SAS Group Extends Chapter 11 Bankruptcy Protection to Facilitate Restructuring Plan
The SAS Group and its subsidiary SAS Scandinavian Airlines (SK) will remain under US Chapter 11 bankruptcy protection until January 8, 2024, following a decision by the US Bankruptcy Court in New York. The court extended the exclusivity period by 100 days to allow the debtors to finalize an equity solicitation process and present a restructuring plan. The extension aims to enable meaningful progress and a competitive dynamic for the best Chapter 11 exit plan.
US Bankruptcy Court Judge Michael E. Wiles passed the order on August 10, 2023, after finding that the extension was in the best interests of all parties involved. The SAS Group’s previous restructuring plan presentation deadline was November 8, 2023, and it was extended once before on April 13, 2023. The court approved the extension without prejudice to further requests for extensions.
The official committee of unsecured creditors supported the motion to extend the exclusivity period, noting promising progress in soliciting equity financing and the development of competitive alternative bids. The debtors, aided by advisors Seabury Securities LLC and Skandinaviska Enskilda Banken AB, have engaged potential investors and are assessing the viability of exit transactions.
Throughout the bankruptcy protection period, the debtors have taken steps to enhance earnings and reduce costs, renegotiating contracts and leases. The SAS Group entered voluntary Chapter 11 bankruptcy protection on July 5, 2022, and retains authorization to operate as debtors in possession. The group’s restructuring plan involves raising new equity capital and converting a significant portion of debt into common equity. The aim is to secure SEK9.5 billion (USD920 million) in new equity capital and restructure over SEK20 billion (USD1.9 billion) of debt under the SAS Forward plan.
In August 2022, the SAS Group collaborated with Apollo Global Management, securing USD700 million in financing to support the Chapter 11 restructuring process. The group opted not to utilize the second tranche due to a better-than-expected liquidity position in Q2 2023, further contributing to its recovery efforts.