SAS secures $505 million financing to aid restructuring

investing.com:

(Reuters) -Scandinavian airline SAS has entered into a new credit agreement for 5.5 billion Swedish crowns ($505.5 million) with U.S. investment firm Castlelake to refinance its loans, increase liquidity and support its exit from voluntary restructuring proceedings, the airline said on Saturday.

The loan provided by Castlelake will refinance and replace the company's existing debtor-in-possession financing credit agreement of 7.7 billion crowns ($707.6 million) entered into with funds managed by Apollo Global Management (NYSE:APO), the company said.

«By entering into this investment agreement, SAS is taking the next step in its chapter 11 process in the US,» CEO Anko van der Werff said in a statement.

The company said it would seek U.S. Court approval of the investment agreement and the new debtor-in-possession financing as soon as possible in Nov 2023.

SAS said the financing comes as part of the transaction structure agreed with a consortium consisting of Castlelake, Air France-KLM S.A., Danish investment firm Lind Invest, and the Danish state following its bankruptcy proceedings.

Air France-KLM, Castlelake, and Lind Invest did not immediately respond to a Reuters request for comment.

In October, the company said that Castlelake would take a stake of about 32% in SAS, Air France-KLM's will be around 20% and the Danish state will hold about 26%, adding that total investments in the reorganized SAS would amount to 12.9 billion Swedish crowns ($1.16 billion).

Scandinavia's biggest carrier filed for bankruptcy protection in the United States in mid-2022 after years of struggling with high costs coupled with low customer demand brought on by the pandemic.

($1 = 10.8814 Swedish crowns)