US Bankruptcy Court Approves SAS’ Restructuring Plan

0 19


  • US bankruptcy court approves SAS Chapter 11 plan, which includes a $1.21 billion investment.
  • The airline hopes to exit the Chapter 11 process by June.
  • SAS says it will emerge as a stronger airline.

Scandinavian Airlines (SAS) has received approval from a US court for its Chapter 11 bankruptcy plan. The carrier now expects to emerge from proceedings by the middle of the year.

SAS bankruptcy plan approved

At a court hearing in New York, US Bankruptcy Judge Michael Wiles granted approval to SAS‘ reorganization plan. A second amended plan was submitted last month and includes a $1.21 billion investment from a consortium including Air France-KLM, the Danish government, and investment firms Castlelake and Lind Invest ApS.

Photo: Matheus Obst | Shutterstock

The plan was reportedly approved by over 99% of its creditors, with the investment involving $725 million in secured convertible debt and $475 million in new equity, with existing equity to be canceled. The deal will also grant junior creditors up to $325 million in cash and equity in the new company.

Anko van der Werff, President & Chief Executive Officer of SAS, commented,

“This is a major milestone for SAS in our transformation plan, SAS FORWARD. The approved Chapter 11 Plan is supported by more than 99% of our creditors that voted, and it sets a clear path to exiting the restructuring proceedings.”

The carrier entered bankruptcy proceedings in July 2022 and has taken significant steps to streamline its operations and cut costs. This includes renegotiating leases with no less than 15 lessors involving 59 aircraft, helping it save at least SEK 1.0 billion ($95.8 million) yearly in fees.

Exit bankruptcy by June

According to SAS, it expects to exit Chapter 11 “around the end of the first half of 2024,” by which time it hopes to have the necessary approvals from various regulatory bodies, as well as completing a company reorganization in Sweden.

Van der Werff added,

“We still have work to do, but this marks a powerful step towards realizing SAS’ potential to remain at the forefront of the airline industry for years to come.”

As Simple Flying reported in November, the airline wanted to exit Chapter 11 proceedings in early 2024, but this was pushed back in January.


SAS Receives $1.2 Billion Investment From Air France-KLM Backed Consortium

SAS filed for Chapter 11 bankruptcy protection last July.

Annual general meeting

The airline hosted its annual general meeting (AGM) on Monday, but the day was overshadowed by climate activists accusing SAS of greenwashing. Led by Greta Thunberg, activists said the carrier was not being honest about its sustainability and criticized the aviation industry’s contribution to carbon emissions.

Once the reorganization plan is complete, SAS will depart Star Alliance – of which it was a founding member – and become a new member of SkyTeam, to which Air France-KLM belongs. The airline group will initially take a 19.9% stake in the reorganized SAS, but has the option to turn this into a majority stake after two years.

Are you happy to see Scandinavian Airlines move closer to exiting bankruptcy protection? Let us know in the comment section.

Source link

Leave A Reply

Your email address will not be published.