(Reuters) -SAS’s rescue has moved a step closer after a U.S. court approved a revised plan from the Scandinavian airline to raise equity.
The long-suffering airline filed for U.S Chapter 11 bankruptcy protection last year.
The court approval of the fundraising proposal – a key element of the “SAS Forward” rescue plan – means investors may start placing bids for a stake in the airline.
An SAS spokesperson said the new procedure reflected court concerns in April about a requirement for bidders to accept the participation of Denmark – the airline’s biggest shareholder alongside Sweden – in the equity raising.
“That formal requirement has been removed,” she said. “But we are clearly stating that the Danish state’s support is essential to succeed with SAS Forward and to emerge from the Chapter 11 process.”
That fact would be taken into account when assessing other bids, she said, adding: “SAS’ intention remains clear that we are doing this together with Denmark.”
In the updated plan, SAS said that without the support of Denmark the emergence from Chapter 11 “will face significant uncertainty, cost, and delay.”
Earlier this month, sources told Reuters that U.S. asset manager Apollo was considering taking a majority stake in SAS.
“The final amount of equity financing raised will depend upon the competitive equity raise process along with the company’s ongoing ability to generate additional liquidity,” SAS said in a statement late on Monday.
Denmark has said it is willing to increase its stake to around 30% from around 22%, if others investors were to take a majority stake.
SAS, whose shares were up 8% at 1013 GMT, said in the statement the deadline for bids was around 13 weeks from now.
It said it now planned to complete the Chapter 11 process “in the latter part of the second half of 2023”. When it started the process in July 2022, its plan was to finalise it within 9-12 months.
($1 = 10.1526 Swedish crowns)
(Reporting by Urvi Dugar in Bengaluru, Marie Mannes and Anna Ringstrom in StockholmEditing by Lisa Shumaker and Mark Potter)
