SAS Scandinavian Seeks Swedish Reorganisation Following US Chapter 11 Plan Approval

SAS AB, the parent company of SAS Scandinavian Airlines, is taking significant steps to secure its financial future by applying for a “company reorganisation” under Swedish law. This legal maneuver, requested on March 27, seeks approval from the Stockholm District Court and is aimed solely at the listed parent company, leaving its subsidiaries and the airline’s operations unaffected and running smoothly.

The move is intricately linked to the recent approval of SAS’s Chapter 11 restructuring plan by the US Bankruptcy Court for the Southern District of New York on March 19. The Swedish reorganisation is a strategic step necessary for the implementation of the Chapter 11 exit strategy, aiming to finalize the airline’s comprehensive restructuring by mid-2024.

SAS’s proactive approach under Chapter 11, part of its SAS Forward transformation strategy, has already paved the way for a rejuvenated ownership structure. A new consortium, including entities like Castlelake, Air France-KLM, Lind Invest, and the Danish state, has committed to injecting USD1.2 billion into the restructured airline. This investment is distributed between USD475 million in fresh equity (unlisted) and USD725 million in secured convertible debt, with a resounding 99% creditor approval rate for the exit plan.

The Chapter 11 process has also enabled SAS to renegotiate aircraft leases. Agreements with 15 lessors covering 59 aircraft have been revised, anticipating annual cost savings of at least SEK1 billion (approximately USD95 million). This financial restructuring is a critical component of SAS’s broader strategy to navigate through its current challenges and emerge as a stronger, more competitive carrier in the global aviation market.