SAS announces recapitalisation plan to continue as a key provider of important Scandinavian airline infrastructure

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As previously announced by SAS AB (“SAS” or the “Company”), the COVID-19 pandemic and the associated travel restrictions have created a global crisis for the aviation industry. SAS immediately implemented a broad range of measures to radically reduce costs as a result of the decline in demand, which is not expected to return to pre COVID-19 levels before 2022. The Board of Directors of SAS (the “Board”) has therefore decided on a revised business plan to tackle the expected effects of the pandemic. The plan includes approximately SEK 4 billion in efficiency improvements in all parts of the Group by 2022. However, neither the broad measures implemented to date nor the planned efficiency improvements will alone be sufficient to help restore the Group’s equity position to pre COVID-19 levels, nor help secure the required level of funding for SAS to continue as a key provider of important Scandinavian airline infrastructure.

In light of this, the Board has decided on a recapitalisation plan (the “Recapitalisation Plan”) that is supported by the Company’s two largest shareholders, the governments of Sweden and Denmark (jointly the “Major Shareholders”), and the third-largest shareholder, the Knut and Alice Wallenberg Foundation (“KAW”). The Recapitalisation Plan is intended to restore equity by SEK 14.25 billion and secure approximately SEK 12 billion of new funding through the following proposed steps:

  • Directed issue of common shares in the amount of approximately MSEK 2,006 to the Major Shareholders;
  • Rights issue of new common shares available to eligible shareholders in an amount of approximately MSEK 3,994, expected to be covered by subscription undertakings and underwriting commitments corresponding to 81,5% of the total amount of the rights issue;
  • Directed issue of new hybrid notes in a total amount of MSEK 6,000 to the Major Shareholders;
  • Conversion of MSEK 2,250 senior unsecured fixed-rate bond due November 2022 into common shares; and
  • Conversion of MSEK 1,500 subordinated perpetual floating rate capital securities[1] into common shares.

The Recapitalisation Plan is subject to necessary general meeting approvals. The Major Shareholders’ participation is conditional on inter alia the conversion of the outstanding bonds and hybrid notes into common shares, the approval by the European Commission and exemption from the mandatory bid obligation from the Swedish Securities Council. The participation by KAW is conditional on the participation by the Major Shareholders.

SAS is committed to its sustainability agenda in line with expectations from the Swedish and Danish governments.

On behalf of the SAS Board of Directors, I would like to thank our shareholders for providing support in these unprecedented and challenging times. I would also like to thank the SAS employees for their exceptional commitment and support during this difficult period. I count on SAS employee groups to support the Recapitalization Plan by finding solutions to deliver the required efficiency improvements.

The Board supports and believes that the Recapitalization Plan presents a balanced way forward given the magnitude of the recapitalization and the conditional burden sharing measures. Along with the Group’s revised business plan, the Recapitalization Plan will enable us to withstand this crisis and return as a profitable and sustainable Scandinavian infrastructure provider,” says Carsten Dilling, chair of the SAS Board of Directors.

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