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Home » SAS Investment Agreement Gives Air France-KLM 20% Equity

SAS Investment Agreement Gives Air France-KLM 20% Equity

    SAS signs investment agreement and replacement facility for existing debtor-in-possession financing.

    SAS has recently entered into an investment agreement and replacement facility for its existing debtor-in-possession financing. This new development aims to provide greater financial stability and support for SAS in its current circumstances. Through this agreement, Air France-KLM gains 20% equity in Scandinavia’s largest airline. As part of this investment, SAS will leave the Star Alliance and join SkyTeam.

    SAS 70 Years Commemorative Livery Source:SAS
    70 Years Commemorative Livery Source: SAS

    SAS has made an investment agreement with a consortium of investors of Castlelake, Air France-KLM, Lind Invest, and the Danish state. The agreement includes a new financing credit agreement of $500 million with Castlelake to support SAS’ restructuring and increase liquidity.

    Earlier, SAS announced that the consortium of investors had been selected as the winning bidder in the financing solicitation process. Now, they have increased their proposed investment by $25 million, resulting in a total investment of $1.2 billion. The investment includes new equity, secured convertible debt, and a facility to refinance SAS’ existing financing.

    The investment agreement outlines the final terms of the equity investment, secured convertible debt, and SAS’ reorganization plan.

    Post-reorganization, the shareholder structure will be as follows: Castlelake will hold approximately 32% of the equity, the Danish State will hold around 26%, Air France-KLM will hold about 20%, Lind Invest will hold around 9%, and the remaining equity will be distributed among certain creditors.

    New Financing Arrangement

    Scandinavian Airlines System Denmark-Norway-Sweden (SAS) has secured a new financing arrangement to support its operations during the Chapter 11 process. The new financing consists of a non-amortizing senior secured term loan facility worth $500 million. This funding will replace the previous $700 million DIP financing agreement SAS had with funds managed by Apollo Global Management.

    The terms of the new financing are quite similar to the previous agreement, with a few notable differences, such as a lower interest rate and the removal of certain fees and equity-linked features. The initial term of the loan is nine months, with the possibility of two three-month extensions if SAS chooses to do so.

    To access the new financing, SAS needs approval from the U.S. Court and must fulfill certain conditions. The company plans to seek approval for the investment agreement and the new DIP financing in November 2023. Repayment of the loan will occur upon emerging from the Chapter 11 process.

    Anko van der Werff, President and Chief Executive Officer of SAS, says:
    ”By entering into this investment agreement, SAS is taking the next step in its Chapter 11 process in the US. The investment is a key milestone in our SAS FORWARD plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.”

    Conditionality of the transaction and expected recoveries in the Chapter 11 process

    The agreed transaction will need to be approved in connection with the confirmation of the Chapter 11 Plan. SAS currently aims to receive approval from the U.S. Court of the Chapter 11 Plan in early 2024, to be followed by obtaining regulatory approvals and the implementation of a Swedish company reorganization (Sw. företagsrekonstruktion) at the SAS AB level (likely to be filed by SAS AB during 2024). The effectiveness of the transaction will occur upon the fulfillment of certain conditions precedent, including receipt of all relevant regulatory approvals, as further set out in the press release announced by SAS on October 3, 2023. No approval is expected to be required from the existing shareholders of SAS AB for the transaction.

    SAS reiterates its expectation set out in the announcement by SAS on October 3, 2023 that there will be only a modest recovery for general unsecured creditors, no recovery for subordinated unsecured creditors, and no value for SAS AB’s existing shareholders upon emergence from the Chapter 11 process. Any payment of recoveries to creditors will be made only after the completion of the transaction and the fulfillment of any conditions for payment to creditors. All of SAS AB’s common shares and listed commercial hybrid bonds are further expected to be canceled, redeemed, and delisted (currently expected to occur during the second quarter of 2024).

    Information regarding Chapter 11 cases

    Find more information about SAS’ voluntary Chapter 11 cases on SAS’ dedicated restructuring website at

    For U.S. Court filings and related documents, visit a separate website managed by SAS’ claims agent, Kroll Restructuring Administration LLC, at

    Advisors In the Transactions

    SAS has chosen Weil, Gotshal & Manges LLP as their global legal counsel, with Mannheimer Swartling Advokatbyrå AB serving as their Swedish legal counsel. Seabury Securities LLC and Skandinaviska Enskilda Banken AB have been appointed as investment bankers. Seabury Securities LLC also acts as restructuring advisors for SAS.

    Castlelake has enlisted the services of Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel, Rothschild & Co. as the investment banker, and SkyWorks Holdings LLC as an aviation consultant.

    Air France-KLM is represented by White & Case LLP, Paul McGeown, and Sheppard, Mullin, Richter & Hampton LLP as co-legal counsel.

    Lind Invest has sought legal counsel from Bech-Bruun Law Firm P/S, with Latham & Watkins LLP serving as their US legal counsel.

    About SAS

    SAS is the leading airline in Scandinavia, operating from major hubs in Copenhagen, Oslo, and Stockholm. They offer flights to Europe, the USA, and Asia. Sustainability is a core value for SAS, as they strive to be at the forefront of sustainable aviation and work towards achieving net zero emissions. To reduce its carbon footprint, SAS invests in sustainable aviation fuel, fuel-efficient planes, and technology innovation in collaboration with partners. Their commitment aligns with the industry goal of reaching net zero CO2 emissions by 2050. SAS also provides ground handling, technical maintenance, and air cargo services alongside their flight operations.

    Learn more at

    [1] All amounts cited are based upon a USD/SEK exchange rate of 11.00

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