Scandinavian airline SAS has taken a decisive step forward in its restructuring. The company announced Sunday night that it has agreed to a cash injection of more than $700 million (680 million euros) with investor Apollo Global Management in order to survive bankruptcy protection proceedings. Management now expects to complete the restructuring within nine to twelve months.
Court approval for the new capital should be available by the end of September. The deal was preceded by an agreement in a wage row with pilots in mid-July, who agreed to cut wages and increase working hours. The pilots’ 15-day strike raised questions about the future of the airline, which was already under pressure from cheap competition. SAS canceled 3,700 flights due to the industrial strike, affecting 380,000 passengers. The costs would have been more than $145 million.
The largest owners of SAS are Sweden and Denmark, each with a share of 21.8 percent. Denmark has pledged to write off part of SAS’s debt and convert part of it into equity, as well as to inject new money if private investors also participate. Sweden supports debt restructuring, but has refused to inject more liquidity. (Abba)
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