Shares in Scandinavian Airlines plunge to become almost worthless after rescue deal announced

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Shares in Scandinavian Airlines have dropped more than 90% after the ailing carrier announced new shareholders in a restructuring scheme that will see the company delisted and existing ownership stakes erased

COPENHAGEN, Denmark — Shares in Scandinavian Airlines dropped more than 90% on Wednesday after the ailing carrier announced new shareholders in a restructuring scheme that will see the company delisted and existing ownership stakes erased.

The rescue deal involving airline alliance Air France-KLM and private equity firms Castlelake and Lind Invest, which became investors alongside the Danish state, was presented late Tuesday.

The deal means that SAS will receive $475 million in new equity and $700 million in convertible debt. Scandinavian Airlines will be taken off the stock exchange in the second quarter of 2024 and no payment will be made to current shareholders.

Castlelake will become the biggest shareholder with a 32% stake, while Air France-KLM will hold 20%. The Danish government will hold 26% of the shares. Lind Invest will control 8.6% and the remaining shares will “most likely… be distributed among and held by certain creditors who may receive recovery in equity,” SAS said in a comment.

Shortly after trading opened on Wednesday at Nasdaq Nordic, which owns most stock exchanges in the Nordic-Baltic region, SAS shares dropped 96% and climbed from there to an 84% drop.

“The SAS management has been very, very specific in saying that these shares will become worthless. This has been the case for over a year now,” Sydbank analyst Jacob Pedersen said.

Investment economist Per Hansen told Danish broadcaster TV2 that the reason why the share had not become totally worthless was that “as long as there is a pulse,