By Dominic Chopping
STOCKHOLM–SAS said Saturday that the investor group that is set to take over the airline has agreed to raise its investment, while a loan from Castlelake will replace a previous financing deal from Apollo Global Management.
The new investment agreement with the Castlelake-led consortium, which also includes Air France-KLM, Lind Invest and the Danish state, have increased their investment by $25 million to $1.2 billion.
Last month, the consortium agreed to pump in $1.18 billion for majority control of the Scandinavian airline, wiping out existing shareholders, with the investor group set to own a total of around 86% of the company. Castlelake will have a 32% stake, the Danish state 25.8%, Air France-KLM 19.9% and Lind Invest 8.6%.
Castlelake will also provide a new $500 million credit agreement to refinance the existing term loan, increase liquidity, and support the airline’s path to exit from its voluntary restructuring proceedings, SAS said.
“By entering into this investment agreement, SAS is taking the next step in its chapter 11 process in the U.S.,” SAS Chief Executive Anko van der Werff said in a statement.
SAS filed for Chapter 11 bankruptcy last year as it worked to push through a comprehensive financial restructuring to cut costs and raise capital under the supervision of the U.S. court system. Earlier this year SAS began running an equity solicitation process as part of the Chapter 11 process, with the aim of soliciting equity investments.
The airline reiterated Saturday that it expects there will be only a modest recovery for general unsecured creditors, with no recovery for subordinated unsecured creditors and no value for existing shareholders upon emergence from the Chapter 11 process. Shares are expected to be delisted during the second quarter of 2024.
Write to Dominic Chopping at [email protected]
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