Swedish airline SAS has successfully exited U.S. Chapter 11 bankruptcy proceedings, marked by a strengthened balance sheet and new ownership. The restructuring process involved the company reorganising over US$2 billion in debt, adjusting its fleet and delisting its stock, which resulted in the elimination of the stakes held by more than 250,000 former shareholders.
During the process, SAS implemented ongoing cost reductions, which contributed to its highest-ever monthly profitability in July. The airline sees potential in a growing market, though specific earnings details were not disclosed. SAS initially filed for bankruptcy protection in July 2022 after years of high costs and low demand. A court-approved plan has now made Air France-KLM, hedge fund Castlelake, investment manager Lind Invest and the Danish government the new owners of the airline.
Air France-KLM will initially hold a 19.9% stake in SAS, expanding its presence in Sweden, Denmark and Norway. This stake could increase, potentially making Air France-KLM the controlling shareholder after a minimum of two years, subject to regulatory approval and financial performance.
As part of its restructuring, SAS will switch its customer loyalty programme next month from Star Alliance, which includes Lufthansa and United Airlines, to SkyTeam, led by Air France-KLM. SAS exits the court proceedings with a total investment of US$1.2 billion, consisting of US$475 million in new unlisted equity and US$725 million in secured convertible debt.
