Scandinavian Airlines Secure More Debt Holder Support for a Key Rescue Operation Part

Scandinavian Airlines confirmed on Friday that they have strengthened more of their debt holders’ support after revision of conversion terms for a key part of a rescue operation with the Swedish and Danish governments

Highlights – Scandinavian Airlines

  • Stockholm based Airline SAS confirmed on Friday that they have secured the support of more of their debt holders after revising conversion terms
  • They confirmed on Friday that they have secured the support of more of their debt holders after revising conversion terms to recover lost revenue due to the pandemic
  • The terms of the new agreement include the conversion of 1.5 billion Swedish crowns in existing hybrid notes into common shares, and a way for debtholders of bonds worth 2.25 billion to either convert their holdings into new commercial hybrid notes or new shares of the airlines among the most notable terms.

Stockholm based Airlines SAS confirmed on Friday that they have secured the support of their debt holders after revising conversion terms for a key part of the rescue plan it is negotiating with the Swedish and Danish governments.

SAS has confirmed on Friday that they have secured the support of more of their debt holders after revising conversion terms to make up for lost revenue due to indefinite suspension or restrictions imposed on air travel due to the Coronavirus pandemic to stay afloat. It is their revised recapitalization plan.

Back in July, they had failed to garner the support of enough debt holders on the proposed plan but now on Friday, they have released a statement saying that they have reached an agreement in principle after conversion terms were revised.

It is reported that a noteholders’ committee played a major role in all of this after encouraging all debt holders to support the proposals at a meeting.

The airlines have said that discussions are still ongoing and they will be making announcements concerning further information developed about the revised recapitalization plan and the time itinerary of the plan set in motion. SAS Airlines’ shares were down by 1.7% at 1000 GMT.

The terms of the new agreement include the conversion of 1.5 billion Swedish crowns (worth $172 million) in existing hybrid notes into common shares. 

It also includes a way for debt holders of bonds worth 2.25 billion to either convert their holdings into new commercial hybrid notes or new shares of the airlines. 

Within the deal, it also includes an increase in the interest rate on 6 billion crowns in state hybrid notes that SAS will be issuing to its majority shareholders. 

The recapitalization plan will have to be investigated, debated on, and passed by the European Commission. 

SAS also claimed in an isolated statement that their demand has slowly picked back up since July as domestic air travel restrictions and limitations were eased. 

Intercontinental and European travel still remains a big uncertainty, they expect the total number of passengers to be down at least 75-76%.

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