SAS goes in for restructuring to stop bankruptcy, shares plunge 95% ⋆ cowboy Ron News Information

Share with:

SAS goes in for restructuring to stop bankruptcy, shares plunge 95%

Robert Besser
07 Oct 2023, 14:30 GMT+10

After the airline announced a financial restructuring on October 3 to prevent bankruptcy, SAS shares plunged by some 95 percent the next day
The collapse in shares of Scandinavia’s biggest carrier negatively affected its more than 250,000 owners, but it also brought new major investors on board
After years of struggling with high costs and low customer demand worsened by the COVID-19 pandemic, SAS filed for bankruptcy protection in the U.S. in 2022

COPENHAGEN, Denmark: After the airline announced a financial restructuring on October 3 to prevent bankruptcy, SAS shares plunged by some 95 percent the next day.

The collapse in shares of Scandinavia’s biggest carrier negatively affected its more than 250,000 owners, but it also brought new major investors on board.

After years of struggling with high costs and low customer demand worsened by the COVID-19 pandemic, SAS filed for bankruptcy protection in the U.S. in 2022.

SAS said that U.S. investment firm Castlelake and Air France-KLM will become new major shareholders alongside the Danish state, and its stock will be delisted from the Stockholm, Copenhagen, and Oslo exchanges.

Air France-KLM said that to strengthen its Nordic presence, it will combine SAS flights into those of its own airlines at its Amsterdam and Paris hubs.

“Air France-KLM is determined to play an active role in the consolidation of European aviation,” the group said.

“Castlelake will take a stake of about 32 percent, Air France-KLM will own around 20 percent, Danish investor Lind Invest 8.6 percent and the Danish state about 26 percent,” SAS said, adding that creditors will receive the remaining equity.

Shares in SAS were down 83 percent to 0.05 Swedish Krona ($0.0045) at 11:44 GMT.

“The fact that the shares still traded at any residual value could be explained by the potential for legal challenges or investor overconfidence,” Sydbank analyst Jacob Pedersen said.

“Management itself has come out to say there was a risk that the shares will become worthless. Now we know the shares will become worthless,” he added.

“If you cannot find someone even more opportunistic and risk-averse than yourself to sell it to, you will ultimately end up with a loss,” he added.