SAS Finalizes Investment Deal and Secures New Financing Amid Restructuring
Airline SAS has reached an investment agreement with a winning consortium and secured $500 million in new financing. The deals require approval from the U.S. Bankruptcy Court.
Scandinavian Airlines System (SAS) announced on November 4, 2023, that it has entered into an investment agreement with a consortium comprising Castlelake, Air France-KLM, Lind Invest, and the Danish state. Concurrently, SAS has secured a new $500 million debtor-in-possession (DIP) financing facility from Castlelake to refinance existing debt and bolster liquidity as it navigates its Chapter 11 restructuring.
The agreement is a crucial step in SAS's plan to emerge from its voluntary restructuring proceedings. The total investment from the consortium has been increased to $1.2 billion, consisting of $475 million in new equity and $725 million in secured convertible debt. This revised structure aligns with the company's ongoing financial recovery efforts.
Following the reorganization, the consortium's ownership stakes will be distributed as follows: Castlelake approximately 32.0%, the Danish state 25.8%, Air France-KLM 19.9%, and Lind Invest 8.6%, with the remaining equity allocated to creditors. The new $500 million DIP financing replaces a previous $700 million facility and offers more favorable terms, including a lower interest rate.
SAS is seeking court approval for these agreements in November 2023, with a target for Chapter 11 plan confirmation in early 2024. Successful approval and implementation are key to the airline's long-term operational stability and future market position.