# SAS bridge financing keeps survival hopes airborne, shares climb
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-15
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Scandinavian airline SAS secures $700 million for reorganisation
Meta Description: Stay updated on SAS's survival journey with bridge financing enabling them to stay afloat, despite bankruptcy protection. Keep an eye on their
URL: https://financedigest.com/sas-bridge-financing-keeps-survival-hopes-airborne-shares-climbhtml

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STOCKHOLM (Reuters) – Scandinavian airline SAS kept its bid for survival aloft at the weekend by securing bridge financing through bankruptcy protection proceedings and sent its shares 9% higher on Monday.

The airline, whose biggest owners are Sweden and Denmark, said on Sunday it had signed a deal with U.S. private equity firm Apollo Global [Management for $700 million in financing](https://www.financedigest.com/how-parents-can-help-students-manage-their-finances.html "How Parents Can Help Students Manage their Finances") to fund its reorganisation under U.S. Chapter 11 bankruptcy protection proceedings.

SAS filed for the protection in July, a day after most of its pilots launched a [crippling two-week strike](https://www.financedigest.com/in-inflation-hit-germany-massive-strike-over-pay-to-cripple-transport.html "In inflation-hit Germany, massive strike over pay to cripple transport") over collective agreements. SAS said the action could scare off lenders and could threaten its existence.

[Shares in SAS were up 9% in morning trade](https://www.financedigest.com/social-trading-is-the-new-way-that-gen-z-are-getting-their-share-of-the-pie.html "Social Trading is The New Way That Gen Z Are Getting Their Share of The Pie"), taking a one-month rise to 26%. The stock is still down 62% in the [past year](https://www.financedigest.com/how-has-growth-of-marine-scrubber-systems-market-taken-off-over-the-past-few-years.html "How has Growth of Marine Scrubber Systems Market Taken Off Over the Past Few Years").

The price of being on the brink of bankruptcy is high, but now the process is getting going, and the hard work of getting [billions in debt dropped and also significantly reducing costs](https://www.financedigest.com/australias-nuclear-submarine-plan-to-cost-up-to-245-billion-by-2055-defence-official.html "Australia’s nuclear submarine plan to cost up to 5 billion by 2055 -defence official") can be accelerated,” Sydbank analyst Jacob Pedersen said.

The reality remains that existing shareholders’ assets are gone and that they are exposed to a big dilution when the [capital increase](https://www.financedigest.com/frances-ynsect-to-refocus-bug-business-after-capital-increase.html "France’s Ynsect to refocus bug business after capital increase") is carried out,” Pedersen said in a note to clients, reiterating a “sell” recommendation for SAS shares.

SAS, which was loss-making before the pandemic due to rising competition from low-cost carriers, has said it needs to slash costs further and [raise more capital](https://www.financedigest.com/shares-in-monte-dei-paschi-plunge-14-after-capital-raise.html "Shares in Monte dei Paschi plunge 14% after capital raise") to survive.

The Swedish government has rejected the plea for more cash but Denmark has said it might write off some [debt and inject fresh funds](https://www.financedigest.com/navigating-the-post-brexit-debt-landscape-opportunities-for-corporate-funding.html "Navigating the post-Brexit debt landscape: opportunities for corporate funding") if SAS found support from private-sector investors.

A Danish finance ministry spokesperson said on Monday the government had noted the bridge [financing deal](https://www.financedigest.com/citi-halted-financing-for-trafiguras-nickel-deals-in-october-bloomberg.html "Citi halted financing for Trafigura’s nickel deals in October – Bloomberg") and repeated that its support for a rescue plan launched by SAS in February was conditional on the airline attracting new large shareholders.

Copenhagen also wants to maintain influence over a range of decisions to ensure SAS [keeps a strong](https://www.financedigest.com/the-late-payments-toolkit-how-to-keep-the-cash-flow-strong.html "THE LATE PAYMENTS TOOLKIT – HOW TO KEEP THE CASH-FLOW STRONG") presence at Danish airports, something it says is important for the small Nordic country’s economy and to keep good global travel connections.

Sydbank’s Pedersen said the [deal with Apollo suggested Apollo could become a major shareholder in SAS by converting the loan to equity](https://www.financedigest.com/private-equity-funds-approach-italys-serie-a-to-explore-media-rights-deal-sources.html "Private equity funds approach Italy’s Serie A to explore media rights deal -sources") at the end of the Chapter 11 process.

(Reporting by Anna Ringstrom, Marie Mannes in Gdansk, Stine Jacobsen in Copenhagen; Editing by Edmund Blair)


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