Air France-KLM to acquire non-controlling stake in SAS

The announcement marks what the business describes as a “major milestone” in its Chapter 11 process, and will see Air France-KLM hold approximately 19.9% of the equity, with the option to take a controlling stake after two years. The deal will also see the airline’s stock delisted from the Stockholm, Copenhagen and Oslo exchanges.  

SAS has said it will continue to operate and serve its customers as usual throughout the implementation of the transaction, which – it says – will likely entail a filing by SAS for a company reorganisation in Sweden in 2024. As a result, SAS common shares and listed commercial hybrids are expected be cancelled, redeemed and delisted.  

As such, no value is expected for existing shareholders in SAS and only a modest recovery is expected for the holders of commercial hybrid bonds.  

The agreed transaction structure includes a total investment in the reorganisation worth nearly $1.2bn –including a $475m in new unlisted equity and $700m in secured debt – as well as $500m worth of refinancing by Castlelake of SAS’ current debtor-in-possession term loan.  

As part of the transaction, SAS is expected to eventually join one of the world’s three major airline alliances the SkyTeam alliance, of which Air France-KLM is a founding member.

Following the news of the financial restructuring, SAS shares slumped by as much as 95%.