SAS Recordsdata for Chapter Safety in US to Push By Restructuring

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By Dominic Chopping

STOCKHOLM–SAS AB mentioned Tuesday that it has filed for chapter 11 chapter safety within the U.S. because it seeks to push by its complete monetary restructuring to chop prices and lift capital beneath the supervision of the U.S. court docket system.

Struggling with excessive debt and an absence of money, SAS earlier this 12 months launched plans to chop annual prices by 7.5 billion Swedish kronor ($725.2 million), convert round SEK20 billion of debt and hybrid notes into widespread fairness and lift a minimum of SEK9.5 billion in new capital.

The Scandinavian airline has additionally been hit by a pilot strike that began Monday and it expects round 50% of its day by day scheduled flights to be cancelled, affecting round 30,000 passengers a day.

“SAS has… been making ready for the choice to make the most of court docket restructuring proceedings so as to handle the corporate’s monetary state of affairs,” SAS Chairman Carsten Dilling mentioned.

“The ongoing strike poses important challenges to our skill to succeed with our transformation. The board has concluded that authorized instruments are required to make progress in our ongoing negotiations with key stakeholders, and in the end to reach making SAS a aggressive and financially sturdy enterprise,” he mentioned.

SAS mentioned it expects to finish its court-supervised course of within the U.S. in 9-12 months.

Write to Dominic Chopping at dominic.chopping@wsj.com

By Dominic Chopping

STOCKHOLM–SAS AB mentioned Tuesday that it has filed for chapter 11 chapter safety within the U.S. because it seeks to push by its complete monetary restructuring to chop prices and lift capital beneath the supervision of the U.S. court docket system.

Struggling with excessive debt and an absence of money, SAS earlier this 12 months launched plans to chop annual prices by 7.5 billion Swedish kronor ($725.2 million), convert round SEK20 billion of debt and hybrid notes into widespread fairness and lift a minimum of SEK9.5 billion in new capital.

The Scandinavian airline has additionally been hit by a pilot strike that began Monday and it expects round 50% of its day by day scheduled flights to be cancelled, affecting round 30,000 passengers a day.

“SAS has… been making ready for the choice to make the most of court docket restructuring proceedings so as to handle the corporate’s monetary state of affairs,” SAS Chairman Carsten Dilling mentioned.

“The ongoing strike poses important challenges to our skill to succeed with our transformation. The board has concluded that authorized instruments are required to make progress in our ongoing negotiations with key stakeholders, and in the end to reach making SAS a aggressive and financially sturdy enterprise,” he mentioned.

SAS mentioned it expects to finish the court-supervised course of within the U.S. in 9-12 months.

The airline had SEK7.8 billion of money as of June 30 and it mentioned it expects to fulfill near-term enterprise obligations, however a chronic strike might have a fabric destructive affect on its liquidity and monetary place, it mentioned.

To guarantee ample funds to finish its restructuring, SAS is in superior talks with various potential lenders for as much as $700 million of bridge financing to assist operations all through the chapter 11 course of, it added.

Aside from flight disruptions because of the strike, SAS mentioned it would proceed to fly all through the chapter 11, whereas reservations, customer support and loyalty applications will proceed as regular. Employee wages and advantages shall be paid with out interruption and distributors and suppliers shall be paid in full beneath regular phrases.

Write to Dominic Chopping at dominic.chopping@wsj.com

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