The management of Scandinavian Airlines (SAS) can now start raising the billions it needs to save the company from bankruptcy after its shareholders gave the rescue plan the “green light” on Tuesday.
In total, more than NOK 14 billion is needed to keep the company afloat over the next two years.
That means state ownership in SAS.
Both Sweden and Denmark entered into billion-dollar loans and a large-scale capital injection by buying shares for billions of kroner.
“I want to be completely honest, that this was crucial for us. I have tried to be transparent with it throughout the crisis. We will not get through this without receiving help to restore our liquidity,” SAS ‘top manager Rickard Gustafson told newspaper Dagens Nyheter.
Creditors skeptical
SAS, like other airlines, has been hit financially during the coronavirus pandemic. For a period of time, almost the entire business was paralyzed.
In June, the company’s management presented a proposal for a rescue plan.
The plan has since been revised several times after the creditors rejected the first draft.
On Tuesday, the company’s shareholders approved the plan at an extraordinary general meeting, and SAS can now start raising the money that the recapitalization plan will secure.
It is expected that the company will put a number of new shares up for sale in October.
For the current shareholders, that means that their shares will be diluted.
No surprises
Researcher Jacob Pedersen at Sydbank believes that SAS has now been rescued and can remain afloat for the next year and a half.
He is not surprised that the shareholders voted to accept the plan, as the alternative would have been bankruptcy.
“It is an important, but not unexpected step. There is no doubt that this rescue plan is the alpha and omega for the company’s survival, as they currently have such large losses due to missing passengers,” Pedersen explained.
How SAS will fare in the long run depends on when and to what extent the passengers return.
“If the low number of passengers persists, there is a risk of having to look for funding again in 1-1.5 years,” Pedersen said.
SAS has already cut around 5,000 full-time positions out of a total of 11,000.
© NTB Scanpix / #Norway Today
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