One of the founding members of Star Alliance has announced plans to move to SkyTeam, following a restructuring that will see Air France-KLM acquire a stake in the Scandinavian airline.
SAS confirmed it had reached “an important milestone” in its US Chapter 11 process, with a consortium including investment manager Castlelake, Lind Invest, Air France-KLM and the Danish government set to take control of the airline .
Under the new structure, which is subject to approval by regulatory authorities and creditors, Air France-KLM will hold approximately 19.9 percent of the capital, with the option to acquire a majority stake after two years.
This will result in the airline “eventually” joining the SkyTeam alliance, of which Air France is a founding member.
Prior to this, SAS said it would “seek to establish commercial cooperation with Air France-KLM and its airlines (subject to customary approvals), for the benefit of Scandinavian customers through increased connectivity.”
SAS faced unprecedented challenges as a result of the Covid-19 pandemic, and in 2020 the EU Commission approved €1 billion in state aid measures from Denmark and Sweden (Norway sold its remaining stake in SAS in 2018). , as part of recapitalization plans that The airline said were necessary to allow it to “continue its operations and its sustainability agenda.”
The restructuring, which is expected to be implemented during 2024, will see the consortium invest a total of $1.175 billion in the airline, including $475 million in new unlisted equity and $700 million in collateralized convertible debt.
Castlelake, which will also provide a $500 million loan to SAS, will hold around 32 percent of the share capital, while the Danish state will hold 25.8 percent, Air France-KLM 19.9 percent and Lind Invest 8.6 percent.
The remaining 13.6 percent of the equity “is very likely to be distributed and held by certain creditors who may receive a recovery of equity.”
Anko van der Werff, President and CEO of SAS, commented on the news:
“The agreed investment is a key milestone in our SAS FORWARD plan and demonstrates that our new investors believe in SAS and our potential to remain at the forefront of the airline industry in the years to come.
“Furthermore, our move toward a partnership with SkyTeam sets a clear path forward for the company. By completing this process and the opportunities that being part of SkyTeam presents, we will be able to further enhance SAS’s offerings for the benefit of our colleagues, customers and communities. We look forward to building a bright future for SAS together.”