SAS and certain of its subsidiaries have voluntarily filed for chapter 11 in the U.S., a legal process for financial restructuring conducted under U.S. federal court supervision. SAS’ operations and flight schedule are unaffected by the chapter 11 filing and SAS will continue to serve its customers as normal, although the strike by SAS Scandinavia pilots will impact the flight schedule.
The company expects to meet its go-forward business obligations in the near term. SAS’ cash-balance was SEK 7.8 billion as of June 30, 2022. The strike has a negative impact on the liquidity and financial position of the company and if prolonged, such impact could become material.
The company is in well-advanced discussions with a number of potential lenders with respect to obtaining additional debtor-in-possession financing for up to US$700 million (the equivalent of approximately SEK 7.0 billion), to support its operations throughout this court-supervised process. Debtor-in possession financing is a specialised type of bridge financing for businesses that are restructuring through a chapter 11 process.
Anko van der Werff, President and Chief Executive Officer of SAS, said, “Over the last several months, we’ve been working hard to improve our cost structure and improve our financial position. We are making progress, but a lot of work remains and the on-going strike has made an already challenging situation even tougher. The chapter 11 process gives us legal tools to accelerate our transformation, while being able to continue to operate the business as usual. We will continue to build back the network connectivity, products and service our customers expect and we will continue to do so throughout this process and beyond. I am convinced that this process will enable us to become an even better airline for our customers and a stronger business partner in the years to come. Becoming a more competitive airline will require the full team’s effort and burden-sharing from all stakeholders. We urge SAS Scandinavia pilots’ unions to end their strike and engage constructively as part of this process.” (£1.00 = SEK 12.55 at time of publication).
