SAS Scandinavian Airlines Secures $1.2 Billion Funding Boost from AF-KLM Consortium
SAS Scandinavian Airlines (SK) has successfully finalized an investment agreement for its Chapter 11 exit financing, securing a total of $1.2 billion. The winning consortium, led by Castlelake, Air France-KLM, Lind Invest ApS, and the Danish state, chose to increase the funding from its original offer of $1.175 billion.
The Nordic carrier selected this consortium a month ago to provide restructuring funds, aiming to replace the previous debtor-in-possession financing from US private equity firm Apollo Global Management.
In a statement issued on November 4, SAS announced that the consortium had raised its proposed investment by $25 million, reaching a total of $1.2 billion. This includes $475 million in new unlisted equity, $725 million in secured convertible debt, and a $500 million facility from Castlelake to refinance SAS’s existing debtor-in-possession financing.
SAS outlined the stake distribution among the consortium members, with Castlelake holding approximately 32%, the Danish state around 25.8%, Air France-KLM at 19.9%, Lind Invest at 8.6%, and the remaining 13.6% to be distributed among eligible creditors through a debt-to-equity swap.
The new debtor-in-possession financing will replace SAS’s existing credit agreement with funds managed by Apollo Global Management. SAS is seeking US court approval of the investment agreement and the new financing in November 2023, followed by regulatory approvals and the implementation of a Swedish company restructuring to be filed by SAS AB next year.
SAS CEO Anko van der Werff expressed confidence in the airline’s future, stating, “By entering into this investment agreement, SAS is taking the next step in its Chapter 11 process in the US. It shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.” This news reflects the positive developments in SAS’s restructuring efforts and the ongoing support from its consortium partners.