SAS announces that the U.S. Bankruptcy Court for the Southern District of New
York (the "Court") has approved SAS' entry into the investment agreement with
the winning bidder consortium in SAS' exit financing solicitation process. The
winning bidder consortium consists of Castlelake, L.P., on behalf of certain
funds or affiliates ("Castlelake"), Air France-KLM S.A. and Lind Invest ApS,
together with the Danish state (collectively, the "Investors").
On November 4, 2023, SAS announced that it had entered into an investment
agreement with the Investors, subject to approval by the Court. The agreed
transaction structure includes a total investment in reorganized SAS
corresponding to USD 1,200 million (SEK 13.2 billion),[1] which includes USD 475
million (SEK 5.225 billion) in new unlisted equity and USD 725 million (SEK
7.975 billion) in secured convertible debt. Today, SAS received Court approval
to enter into the investment agreement.
SAS also received final Court approval for its new debtor-in-possession ("DIP")
financing credit agreement with Castlelake for USD 500 million (SEK 5.5
billion). The funding related to the new DIP financing credit agreement is being
used to, among other things, refinance SAS' original DIP term loan with a
significant extension of the DIP loan financing period sufficient to bridge to
final emergence from chapter 11. On November 9, 2023, the Court authorized SAS
to draw USD 450 million (SEK 4.95 billion) and, today, the Court authorized SAS
to draw the remaining USD 50 million (SEK 550 million) under the new DIP
facility.
Anko van der Werff, President & Chief Executive Officer of SAS, comments:
"The investment agreement that was approved by the court today is a key
milestone in our SAS FORWARD plan, and it shows that our new investors believe
in SAS and our potential to remain at the forefront of the airline industry for
years to come."
Conditionality of the transaction and expected recoveries in the chapter 11
process
The agreed exit transaction remains subject to approval in connection with the
confirmation of SAS' chapter 11 plan of reorganization (the "Chapter 11 Plan").
SAS currently aims to receive approval from the Court of the Chapter 11 Plan in
early 2024, to be followed by obtaining regulatory approvals and the
implementation of a Swedish company reorganization (Sw. företagsrekonstruktion)
at the SAS AB level (likely to be filed by SAS AB in 2024). The effectiveness of
the transaction will occur upon the fulfilment of certain conditions precedent,
including receipt of all relevant regulatory approvals, as further set out in
the press release announced by SAS on October 3, 2023. No approval is expected
to be required from the existing shareholders of SAS AB for the transaction.
SAS reiterates its expectation set out in the press release announced by SAS on
October 3, 2023 that there will be only a modest recovery for general unsecured
creditors, no recovery for subordinated unsecured creditors and no value for SAS
AB's existing shareholders upon emergence from the chapter 11 process. Any
payment of recoveries to creditors will be made only after the completion of the
transaction and the fulfilment of any conditions for payment to creditors. All
of SAS AB's common shares and listed commercial hybrid bonds are further
expected to be cancelled, redeemed and delisted (currently expected to occur
during the second quarter of 2024).
Information regarding chapter 11 cases
Additional information regarding SAS' voluntary chapter 11 cases is available on
SAS' dedicated restructuring website, https://sasgroup.net/transformation. Court
filings and other documents related to the chapter 11 cases in the U.S. are
available on a separate website administered by SAS' claims agent, Kroll
Restructuring Administration LLC, at https://cases.ra.kroll.com/SAS. Information
is also available by calling (844) 242-7491 (U.S./Canada) or +1 (347) 338-6450
(International), as well as by email at SASInfo@ra.kroll.com.
Advisors
Weil, Gotshal & Manges LLP is serving as global legal counsel and Mannheimer
Swartling Advokatbyrå AB is serving as Swedish legal counsel to SAS. Seabury
Securities LLC and Skandinaviska Enskilda Banken AB are serving as investment
bankers, and Seabury Securities LLC is also serving as restructuring advisor to
SAS. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel,
Rothschild & Co is serving as investment banker, and SkyWorks Holdings LLC is
serving as aviation consultant to Castlelake. White & Case LLP, Paul McGeown and
Shepard, Mullin, Richter & Hampton LLP are serving as co-legal counsel to Air
France-KLM. Bech-Bruun Law Firm P/S is serving as legal counsel and Latham &
Watkins LLP is serving as US legal counsel to Lind Invest.
For further information, please contact:
SAS Press office, +46 8 797 29 44
Investor relations, +46 70 997 7070
SAS, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and
Stockholm, flies to destinations in Europe, USA and Asia. Spurred by a
Scandinavian heritage and sustainable values, SAS aims to be the driving force
in sustainable aviation and in the transition toward net zero emissions. We are
continuously reducing our carbon emissions through using more sustainable
aviation fuel, investing in new fuel-efficient aircraft and technology
innovation together with partners - thereby contributing towards the industry
target of net zero CO2 emissions by 2050. In addition to flight operations, SAS
offers ground handling services, technical maintenance and air cargo services.
Learn more at https://www.sasgroup.net
ADDITIONAL INFORMATION
The press release does not constitute an offer to sell or issue, or the
solicitation of an offer to buy or acquire, or subscribe for, shares or any
other financial instruments in SAS.
This press release contains forward-looking statements that reflect SAS' current
view of future events as well as financial and operational development. These
statements may include, without limitation, any statements preceded by, followed
by or including words such as "intend", "assess", "expect", "may", "plan",
"estimate" and other expressions involving indications or predictions regarding
future developments or trends and other words and terms of similar meaning or
the negative thereof. These forward-looking statements have been prepared for
illustrative purposes only, are not based on historical facts, are not
guarantees of future performance, reflect SAS' beliefs and expectations, and are
subject to known and unknown risks, uncertainties and assumptions and other
factors that could cause actual events and performance to differ materially from
any expected future events or performance expressed or implied by such forward
-looking statements. As a result of these risks, uncertainties, assumptions and
other factors, you should not place undue reliance on these forward-looking
statements as a prediction of actual future events or otherwise. The information
contained in this press release is subject to change without notice and, except
as required by applicable law, SAS does not assume any responsibility or
obligation to update publicly or review any of the forward-looking statements
contained in it, whether as a result of new information, future events or
otherwise.
[1] All amounts cited are based upon an assumed USD/SEK exchange rate of 11.00.