Air France-KLM to Acquire SAS Stake as Part of Restructuring Strategy

05 Oct, 2023

Air France-KLM to Acquire SAS Stake as Part of Restructuring Strategy

SAS has recently confirmed a comprehensive restructuring agreement valued at nearly $1.2 billion, signaling its intention to emerge from Chapter 11 bankruptcy. This financial package encompasses contributions from various stakeholders, including Air France-KLM, investment firm Castlelake, Lind Invest, and the Danish government. The airline had initiated its bankruptcy proceedings in the United States back in July 2022.

In light of this arrangement, Air France-KLM is set to acquire a stake of up to 19.9 percent in SAS, while Castlelake will hold approximately 32 percent, the Danish government 25.8 percent, and Lind Invest approximately 8.6 percent. The remaining equity will be apportioned among creditors, who may receive recovery in the form of equity. However, it's essential to note that the proposal is contingent on specific conditions and regulatory approvals, including assessments by the European Commission, the U.S. court overseeing the Chapter 11 reorganization, and the Swedish court.

As part of this transaction, SAS has plans to eventually become a member of the SkyTeam Alliance, a consortium where Air France-KLM holds a founding membership while discontinuing its association with the Star Alliance. These changes, however, are subject to the necessary approvals and SAS's successful emergence from the Chapter 11 process. Additionally, SAS intends to explore opportunities for commercial collaboration with Air France-KLM and its affiliated airlines.

Throughout the implementation of this transaction, SAS will continue its operations, although the exact closing date remains unspecified at this time.