Apollo looks to acquire majority stake in troubled SAS

It is understood that US asset manager Apollo Global Management Inc. (Apollo) is looking to apply for approval from both Danish and Swedish regulators to acquire a majority stake in stricken carrier SAS AB (SAS) as part of its Chapter 11 bankruptcy plan.

In July 2022 the Scandinavian carrier filed for Chapter 11 bankruptcy protection and since then has lost approximately 60% of its value after wage discussions with pilots collapsed. Apollo has also invested in Mexican and US carriers, but acquiring a majority stake in a European carrier will contravene European Union rules which forbid more than a 50% stake in any of its carriers being held by a non-EU member country. However, as a substantial percentage of Apollo's capital originates from European investors, the private equity giant is hoping to get the deal approved according to a Reuters News Agency source.

While both Apollo and SAS refused to comment on the speculation, it is also understood that if the acquisition is successful, then the deal should be tied up by the end of the year. Apollo will mainly work with aviation regulators in Sweden and Denmark to secure approval, the first source said. The European Commission would also be involved, but the national regulators would be responsible for giving the go-ahead for a change of ownership. The move comes as the airline looks for large investors and seeks to raise equity as part of its Chapter 11 bankruptcy plan. It has also secured a US$700 million debtor-in-possession (DIP) loan from Apollo to fund it through process. The U.S. company could become a major shareholder in SAS by converting that loan to equity at the end of the process.