SAS Gets $700 Million Bridge Financing From Apollo Global Management -- Update
15 August 2022 - 4:50PM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Scandinavian airline SAS AB said Sunday that it has
entered into a $700 million bridge financing agreement with Apollo
Global Management Inc. as it continues working through the chapter
11 bankruptcy-protection process.
The so-called debtor-in-possession, or DIP, financing credit
agreement is a specialized type of bridge financing used by
businesses that are restructuring through a chapter 11 process. The
DIP financing, along with cash generated from the airline's ongoing
operations, enables SAS to continue meeting its obligations
throughout the chapter 11 process, it said.
SAS earlier this year launched a comprehensive restructuring
plan to cut annual costs by 7.5 billion Swedish kronor ($734.8
million), convert around SEK20 billion of debt and hybrid notes
into common equity and raise at least SEK9.5 billion in new
capital.
It last month filed for chapter 11 bankruptcy protection in the
U.S., as it seeks to push through the plan to cut costs and raise
capital.
As part of the DIP financing deal, SAS said that Apollo could
convert its loan into new equity in SAS. If it were to do this,
Apollo has agreed terms with the Danish state that could see
Denmark acquire up to $250 million of Apollo's equity interests in
SAS.
The Swedish and Danish states each own 21.8% in SAS and have
both showed support for converting their debt into equity, while
Denmark said it could potentially invest new capital.
Norway doesn't hold an equity stake in SAS, but has shown
support for the transformation plan with the government saying that
it might agree to convert its outstanding debt into SAS shares.
SAS anticipates receiving court approval for its DIP financing
by mid-September.
The DIP facility matures nine months after the closing date, but
may be extended for an additional three-month period up to three
times, subject to the company paying an escalating extension
fee.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
August 15, 2022 02:35 ET (06:35 GMT)
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