A bankruptcy court in the US rejects the crisis-stricken airline SAS's plan to raise new capital through new investors, writes Dagens Næringsliv.
On Monday, SAS chose not to utilize an emergency loan through Apollo Global Management as the airline considered that raising capital was a better way to supplement its liquidity position.
Judge Michael E. Wiles refers to that the Danish state has shown interest in increasing its stake in the company but has not committed to the size of the investment.
During the trial, he allegedly saw through the setup.
”"You expect me to approve a lock-in by an investor without that investor having committed to such a lock-in? That's highly unusual for me and I have trouble accepting it, to be honest," he told SAS. SAS -8,71% attorney Kelly Di Blasi at the law firm Weil, Gotshal & Manger, according to Dagens Næringsliv.
According to Jacob Pedersen, head of analysis at Danish Sydbank, the judge's objection is based on the fact that the Danish state has not yet received the green light from the EU to increase its stake in SAS.
”Without the Danish state, there are probably no other investors who will buy shares,” he says.
At Wednesday's court hearing, the judge asked SAS to come back with an adjusted rescue plan.
The rejection means an increased risk that SAS will not survive in the long term, Jacob Pedersen believes.
”"Until today, I saw it as pretty certain that SAS would get through this. I still think so, in principle. But the rejection underlines the risks."”
SAS's press officer Klas Landelius writes in a comment to Dagens Næringsliv that they will review the court's comments and that they have no further comments at the moment.
SAS hopes to get at least SEK 9.5 billion in new capital within the framework of the ongoing reconstruction process. Di has previously reported on that process., which has been ongoing since June of last year. At the same time that the request for a new share issue was submitted to the bankruptcy court on April 6, the airline took the opportunity to raise its forecasts, and by a wide margin. Revenues for 2025/2026 are being increased from SEK 49 billion to SEK 58 billion, while the EBIT margin is being raised from 6-8 percent to 9-10 percent.
In the event that the new share issue is closed, SAS's existing shareholders' investment will in principle go up in smoke.
SAS expects "that there will be no or very little value left for existing shareholders in SAS AB after the company's restructuring process is completed," a press release from the company said.
On Monday, April 17, SAS announced that it will not utilize the second part of the emergency loan that the airline received through Apollo Global Management during the second quarter. At that time, the capital raising process was stated as an opportunity for SAS to supplement its liquidity position in a way other than through the loan, as reported by Di at the time. However, it was found that SAS had not actually met all the requirements to make the emergency loan available.
Source: TT-DI.SE
