SAS has said it has reached a major milestone in its chapter 11 reorganisation as Air France-KLM is set to take a stake in the airline.
The Scandinavian carrier voluntarily filed for chapter 11 last July and the shake up will now see a consortium which includes investment manager Castlelake, Lind Invest, Air France-KLM and the Danish government set to take control of the airline.
Under the new structure, which is subject to approval from
regulatory authorities and creditors, Air France-KLM will hold
approximately 19.9 per cent of the equity, with the option to take a
controlling stake after two years.
As part of the transaction, SAS will leave Star Alliance and join SkyTeam, of which Air France-KLM is a founding
member, although a timeline for this switch has yet to be announced.
SAS will continue to operate and serve its customers as usual
throughout the implementation of the transaction, which is likely to
entail a filing by the listed parent company for the SAS
group (SAS AB) for a company reorganisation in Sweden in 2024.
Carsten Dilling, chairman of the board of SAS, said:“This
is a significant achievement of our transformation plan, SAS FORWARD.
We have carried out a broad, competitive and thoroughly evaluated equity
solicitation process, and we are confident that the selected bid is the
most favourable for SAS, its creditors and other stakeholders.
"Securing
new capital is one of the key pillars in the SAS FORWARD plan and will
provide a strong financial foundation to help drive our airline forward
and facilitate our emergence from the US chapter 11 process. While
there is still work remaining, I am pleased to see the great progress we
are making to be a competitive and financially strong company.”
Scandinavian customers will eventually benefit through the reorganisation as passengers will enjoy greater connectivity with Air France-KLM and its routes.
Benjamin Smith, CEO of Air France-KLM, said: “We are pleased to
be part of the winning bidding consortium selected by the board of SAS.
Air France-KLM looks forward to establishing strong commercial ties with
SAS.
"This
cooperation will allow Air France-KLM to enhance its position in the
Nordics and improve connectivity for Scandinavian and European
travellers. We look forward to being a part of this new chapter in SAS’
history and thank the board of SAS for their trust.”