SAS has received approval of its Plan of Reorganisation, known as the “Chapter 11 Plan,” by the U.S. Bankruptcy Court for the Southern District of New York. The effectiveness of this plan is contingent upon various conditions, including regulatory approvals and a reorganisation at the SAS AB level in Sweden. SAS anticipates emerging from Chapter 11 proceedings by the end of the first half of 2024, with no recovery expected for subordinated creditors and existing shareholders of SAS AB. All common shares and listed commercial hybrid bonds of SAS AB are set to be cancelled, redeemed and delisted during the restructuring process. Despite these proceedings, SAS operations and flight schedule remain unaffected and the airline assures continued service to customers.
SAS initiated voluntary Chapter 11 proceedings in the U.S. to expedite the implementation of its comprehensive business transformation plan, SAS FORWARD. This process aimed to secure agreements with key stakeholders, restructure debt obligations, reconfigure the aircraft fleet and inject significant capital.
Throughout the Chapter 11 process, SAS successfully reconfigured its aircraft fleet and renegotiated lease agreements with 15 lessors, covering 59 aircraft. These amended lease agreements are expected to yield targeted annual cost savings of at least SEK 1.0 billion in reduced aircraft lease expenses and related annual cash flow items.
Additionally, SAS concluded a competitive exit financing solicitation process, with Castlelake, L.P., Air France-KLM S.A., Lind Invest ApS, and the Danish state selected as the winning bidder consortium. This consortium will provide a total investment of US$1,200 million, comprising US$475 million in new unlisted equity and US$725 million in secured convertible debt, to support the reorganised SAS.
The Chapter 11 Plan, which was approved by the Court on March 19, 2024, is supported by more than 99% of the creditors that voted on the Chapter 11 Plan.
