Scandinavian airline SAS has secured $700 million of financing to support operations through its Chapter 11 restructuring process.
The European carrier voluntarily entered Chapter 11 restructuring on July 5, 2022, saying the process would give it the legal tools to help speed up its transformation, including negotiating aircraft deals.
The debtor-in-possession (DIP) financing, a type of bridge financing for companies in Chapter 11 process, is being provided by funds managed by investment firm Apollo Global, SAS announced on August 14, 2022. It expects US Court approval for the DIP financing by mid-September 2022.
“We are pleased to have secured this financing commitment from investment firm Apollo Global Management, which follows an extensive and competitive process”, said Carsten Dilling, Chairman of the Board of SAS, in a statement. “With this financing, we will have a strong financial position to continue supporting our on-going operations throughout our voluntary restructuring process in the U.S.”
SAS has been trying to restructure to meet increased competition and changing travel trends both following the pandemic and as a result of climate concerns. However, plans to cut costs were met with criticism by pilots, who commenced a costly strike in July 2022 during the busy summer period.
Under the Chapter 11 process, SAS is aiming to restructure its debt, reconfigure its fleet and raise fresh funds. The airline said it hopes to raise equity in the first half of 2023 and exit the court-supervised process within 9-12 months from July 2022.
“SAS is one of Europe’s leading airlines and we are pleased to support the business operations as they implement their restructuring plans to emerge a stronger company,” said Apollo Partner Antoine Munfakh.