Airline SAS wins court approval on $1.2b restructuring

Scandinavian airline SAS AB won bankruptcy court approval on a debt restructuring funded by a $1.2b investment anchored by Air France-KLM and private equity firm Castlelake LP. Judge Michael Wiles said Tuesday in a Manhattan hearing that he’d approve SAS’s restructuring plan pending final technical changes to his court order. The decision clears SAS’s path to exit Chapter 11 after the airline sought court protection in July 2022 in the wake of a substantial revenue drop caused by the Covid-19 pandemic, pilot strikes and fierce competition from lower cost carriers. SAS CEO Anko Van der Werff thanked Judge Wiles for approving the restructuring. “It’s been a complicated case,” Van der Werff said in court. “I’m really happy where we got to.” Enactment of the restructuring is contingent upon approval from various regulatory authorities and completion of a related Swedish restructuring proceeding, the company said in February. SAS has said it will emerge from bankruptcy with roughly $1.1b in unrestricted cash and $2.2b in net debt, compared to $4.2b in net debt at the time it filed Chapter 11. SAS has said it anticipates emerging from Chapter 11 in the first half of 2024. The airline selected the Air France-KLM and Castlelake-led investment in October after spending months searching for new capital. The investment consortium also includes Lind Invest ApS and the Danish state. The investment is comprised of $475m in new, unlisted equity and $725m in secured convertible debt, according to court documents.<br/>