Stockholm--SAS has recently announced that the investor group set to take over the airline has agreed to raise its investment. In addition, a loan from Castlelake will replace a previous financing deal from Apollo Global Management.
The Castlelake-led consortium, which includes Air France-KLM, Lind Invest, and the Danish state, has increased their investment by $25 million, bringing the total investment to $1.2 billion. This agreement allows the investor group to gain majority control of the Scandinavian airline, with a combined ownership of approximately 86% of the company. The distribution of ownership will be as follows: Castlelake with a 32% stake, the Danish state with 25.8%, Air France-KLM with 19.9%, and Lind Invest with 8.6%.
New Credit Agreement
Castlelake will also provide a new $500 million credit agreement. This credit agreement will serve to refinance the existing term loan, increase liquidity, and support SAS's path to exit from its voluntary restructuring proceedings.
Chapter 11 Process
SAS filed for Chapter 11 bankruptcy last year as part of its comprehensive financial restructuring plan aimed at reducing costs and raising capital. The airline began an equity solicitation process earlier this year to attract equity investments.
SAS CEO Anko van der Werff stated, "By entering into this investment agreement, SAS is taking the next step in its Chapter 11 process in the U.S."
Outlook for Creditors and Shareholders
SAS reiterated that it expects only a modest recovery for general unsecured creditors and no recovery for subordinated unsecured creditors. Existing shareholders will also not receive any value upon emergence from the Chapter 11 process. The airline anticipates that shares will be delisted during the second quarter of 2024.