Stockholm - SAS, the Scandinavian airline, has announced that it will submit an amended Chapter 11 plan of reorganization to the U.S. Bankruptcy Court. The plan will outline the expected recoveries for the airline's general unsecured creditors.
According to SAS, the plan includes an allocation of up to $325 million for general unsecured creditors. This amount consists of $250 million in cash and $75 million in new equity.
The $75 million in new equity will be distributed among unsecured creditors, including the Danish, Norwegian, and Swedish states, as well as certain creditors with whom the airline expects to maintain ongoing relationships. These creditors include aircraft lessors, pilot unions, and key suppliers.
In contrast, other creditors, such as holders of listed commercial hybrid bonds and those with smaller claims, will receive a cash-only recovery.
Holders of the company's listed commercial hybrid bonds can expect an initial cash recovery between 6.9% and 9.4% of the nominal value of their claims after the airline emerges from the Chapter 11 process. There is also a possibility of an additional cash distribution ranging from 13.1% to 15.6%.
SAS emphasized that subordinated creditors will not receive any recovery, and existing shareholders will not retain any value. All shares and listed commercial hybrid bonds will be cancelled, redeemed, and delisted.
SAS filed for Chapter 11 bankruptcy in 2022 as part of its efforts to undertake a comprehensive financial restructuring to reduce costs and raise capital. The process has been overseen by the U.S. court system. Recently, SAS reached a deal with Castlelake, Air France-KLM, Lind Invest, and the Danish state, where the consortium will inject $1.2 billion into the airline in exchange for majority control.
SAS anticipates emerging from the Chapter 11 process towards the end of the first half of 2024.
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