The Sweden-based company SAS initiated its restructuring proceedings in order to accelerate the implementation of its comprehensive business and financial transformation plan, SAS FORWARD.
As per the airline, the SAS FORWARD is aimed at achieving a full transformation of SAS’ business, including optimization of its network and fleet, achieving unit cost competitiveness and building a sustainable future.
Worth noting, Since year 2022, SAS had remained in a bankruptcy protection (Chapter 11) process in the United States, which obligied the carrier to report its finance figures each month.
- Chapter 11 bankruptcy allows a debtor—typically a corporation, a sole proprietorship, or a partnership—to outline a plan of reorganization that allows it to continue operations while paying creditors over time.
- Carriers or Companies that are overwhelmed by debt and don’t have the financial resources to pay their debts, due to business disruptions in their operations or weak sales leading to net losses, generally get compelled to file Chapter 11.
- Some of the largest U.S. carriers, such as American Airlines, have filed for Chapter 11 bankruptcy and managed to return back into profitability.
Over the course of the restructuring proceedings, SAS has successfully restructured more than USD 2 billion of debt, adjusted its aircraft fleet and related costs and reached agreements with key stakeholders, creditors and vendors.
SAS has also successfully concluded a competitive exit financing solicitation process, selecting Castlelake, Air France-KLM and Lind Invest, together with the Danish State, as the winning bidder consortium.
The exit financing transaction included a total investment in reorganized SAS of USD 1.2 billion, comprising of USD 475 million in new unlisted equity and USD 725 million in secured convertible debt.
SAS Scandinavian said in a statement,
Nearly all creditors voting in the respective restructuring proceedings in the US and Sweden supported the restructuring plans.
The restructuring proceedings in both the US and in Sweden have now been successfully completed and distributions to creditors entitled to receive any cash, equity or contingent value notes (as further described in SAS’ previous press releases) are expected to take place during the coming month.
As per the carrier, SAS now emerges as a financially robust company with a strengthened capital structure and with substantial liquidity. The company has also made significant progress with operational improvements and in building a competitive business:
Anko van der Werff, President & Chief Executive Officer of SAS, said:
“This is a historic day that marks the start of an exciting future for SAS’ customers, partners and colleagues. We have successfully completed our restructuring proceedings and we are now entering a new era."
It has been a complex process and I’m thankful for the constructive collaboration with creditors and partners, for the valuable support from the Board, as well as impressive efforts, energy and enthusiasm throughout our organization."
"Efforts that made it possible to save and restart one of the finest companies in Scandinavia. Now, we must look ahead and complete the transformation that we have started, continue our commitment to achieving net-zero emissions by 2050, and take advantage of the opportunities in a growing market. We have an excellent team, we are shortly joining the SkyTeam alliance family, and we have every opportunity to remain a leader in our industry for generations to come.”
Carsten Dilling, resigning Chairman of the Board of SAS, said:
“SAS’ emergence from the restructuring proceedings marks a turning point for the company and I will now hand over leadership to a new Board. On behalf of the Board, I would like to thank CEO Anko van der Werff and his team for their hard work, dedication and their commitment to saving this company and in building a strong new foundation for the future."
"They have done a truly remarkable job. I feel confident that SAS is in good hands to continue connecting Scandinavia with the world and the world with Scandinavia. For me, it has been an honor to help lead SAS through these difficult years to where we are today.”
Kåre Schultz, designated new Chairman of the Board of SAS, said :
“I am honoured to be appointed as new Chairman of SAS, and I look forward to leading the Board’s work as SAS continues its proud legacy as Scandinavia’s leading airline. SAS has done a truly impressive job in navigating through the restructuring proceedings, and in building a competitive business positioned for growth."
"Together with SAS’ new investors, board and management, as well as with our partners in the SkyTeam alliance, we will continue to collaborate with partners and customers to drive transformative changes in aviation.”
Joe McConnell, Partner and Deputy Co-Chief Investment Officer at Castlelake, said :
“Castlelake congratulates SAS on its successful completion of restructuring proceedings and is gratified to have played an important role in its journey by providing a keystone financing solution. We look forward to watching SAS continue its longstanding legacy as an iconic brand and service provider in Scandinavia.”
The covid pandemic battered the airline industry. In the begining, due to lockdowns, air travel largely went away for over a year, and international air travel was hit even harder, as aviation industry saw its historic low.
Carriers had to ground most of its fleet as they were barely flying and the planes that did take off had very few passengers. However, expenses for the carriers did not stop. Airlines still had to pay their employees and keep their fleet in working order.
Owing to a similar scenario, in July 2022, the Scandinavian airline, SAS, announced that it has gone bankrupt a day after 1,000 pilots walked out on strike.
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