The airline SAS and some of its subsidiaries announced that they are initiating court proceedings in the United States to apply for Chapter 11.
SAS warns that this is the next step in its rescue plan, called SAS Forward, according to a stock exchange announcement on Tuesday morning.
The application has been filed in a court in New York.
Chapter 11 initiates a legal process for financial restructuring under the supervision of a US federal court.
The news comes the day after the mediation between SAS and their pilots broke down, and 900 pilots went on strike.
“SAS’s operations and scheduled flights are not affected by the Chapter 11 application, and SAS will continue to offer its services to customers as usual. Scheduled flights will, however, be affected by the strike initiated by SAS Scandinavia’s pilot associations,” the stock exchange announcement stated.
“The company is expected to fulfill its obligations in the short term. The strike has a negative effect on the company’s liquidity and financial position, and this effect can be significant if the strike is prolonged,” it is further stated.
SAS further states that they are in talks with a number of potential lenders to secure additional financing of up to USD 700 million, almost NOK 6.9 billion, among other things, to maintain the company’s activity during the legal process.
SAS expects the legal process in the USA to be completed within 9-12 months.
SAS hopes that through the legal process, it will reach agreements with key stakeholders, restructure the company’s obligations, reorganize the fleet, and get a significant injection of capital.
Source: © NTB Scanpix / #Norway Today / #NorwayTodayNews
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