SAS selected (03-Oct-2023) Castlelake, Air France-KLM, Lind Invest and the Danish State as the winning bidder consortium in its exit financing solicitation process. Details include:
- The transaction structure includes a USD1175 million investment in the reorganised SAS, including USD475 million in new unlisted equity, USD700 million in secured convertible debt and a USD500 million refinancing by Castlelake of SAS' debtor-in-possession term loan;
- Post-reorganisation shareholder structure:
- Castlelake: 32% of equity and 55.1% of convertible debt;
- Danish State: 25.8% of equity and 29.9% of convertible debt;
- Air France-KLM: 19.9% of equity and 5% of convertible debt;
- Lind Invest: 8.6% of equity and 10% of convertible debt;
- The remaining 13.6% of equity is likely to be held by certain creditors that may receive recovery in equity;
- The convertible debt is expected to be secured and have a maturity of seven years and an interest of SOFR plus 650bps p/a, and may be converted into common shares based on certain terms and valuation metrics. The convertible debt is further expected to be subject to an upfront fee corresponding to 1.5% of the committed amount, payable to the investors by the reorganised SAS;
- Implementation of the Chapter 11 Plan in Sweden by way of SAS AB (the listed parent company for the SAS group) filing for a Swedish reorganisation in 2024;
- Cancellation and redemption of all of SAS AB's common shares (for zero consideration) and all listed commercial hybrid bonds (expected to receive only a modest recovery) and consequently a delisting from Nasdaq Stockholm, Nasdaq Copenhagen and Oslo Børs following completion of the Swedish reorganisation, which is expected to occur during 2Q2024;
- The details for the transaction structure remain to be finalised between the investors and SAS. The transaction will also need to be approved as part of SAS' Chapter 11 plan of reorganisation.
SAS is expected to eventually join SkyTeam and exit Star Alliance. SAS will seek to establish a commercial cooperation with Air France-KLM and its airlines. Air France-KLM CEO Benjamin Smith stated: "Air France-KLM looks forward to establishing strong commercial ties with SAS. With its well-established position in Scandinavia and strong brand, SAS offers tremendous potential to Air France-KLM. This cooperation will allow Air France-KLM to enhance its position in the Nordics and improve connectivity for Scandinavian and European travellers". [more - original PR - SAS] [more - original PR - Air France-KLM]