Skip to content
Home » Aviation News » SAS Updates On Creditor Recovery in Chapter 11 Process

SAS Updates On Creditor Recovery in Chapter 11 Process

SAS Enhances Chapter 11 Recovery Prospects – Secures Backing from Creditors’ Committee

SAS is set to present an updated proposal for its Chapter 11 reorganization to the New York Southern District U.S. Bankruptcy Court. This plan will outline potential recoveries for unsecured creditors, including SAS AB’s commercial hybrid bondholders. The court must approve the final plan, which SAS may enhance further.

Bondholders with SAS AB’s commercial hybrids can anticipate an initial cash recovery of up to 9.4% of the claim’s nominal value once SAS exits the Chapter 11 process. A subsequent cash distribution of up to 15.6% may also occur, bringing the total possible recovery to 25%. This additional distribution depends on certain conditions, which the reorganization documents will elaborate on.

The Unsecured Creditors’ Official Committee, involved in the Chapter 11 proceedings, endorses the new plan. It strongly recommends that all unsecured claim holders vote to accept SAS’s reorganization proposal.

Projected Compensations

SAS has updated its financial outlook, emphasizing that unsecured creditors will only see a limited monetary return. It also states that subordinate creditors should not expect any payback, and current SAS AB shareholders will likely lose their investment value. Following the company’s reorganization under Chapter 11, all common shares and commercial hybrid bonds associated with SAS AB will be canceled and removed from active trading.

The reorganization plan sets aside nearly USD 325 million for unsecured creditors. This fund comprises approximately USD 250 million in cash and around USD 75 million in newly issued equity. According to the agreement with new investors, a significant portion of this cash, about USD 213 million, is reserved for future payment to these creditors, subject to certain conditions. The availability of these funds depends on resolving specific State non-tax claims or confirming they do not exist. Any payments SAS makes for these claims and related costs will lessen the fund. Determining the exact amounts and distribution timeline for additional creditor payments may take years.

With the ongoing restructuring, SAS predicts that commercial hybrid bondholders will initially receive between 6.9% and 9.4% of their claim’s nominal value after the company exits Chapter 11. Additionally, bondholders might get another 13.1% to 15.6%, possibly reaching a total recovery of 20.0-25.0%, upon the distribution of reserved funds. Other general unsecured creditors are also expected to receive cash and/or equity as part of the restructured SAS, detailed in the Chapter 11 Plan.

SAS Chapter 11 Planned Recoveries

  • Holders of permitted general unsecured claims against SAS AB:

    • Expected to receive an initial payout between 6.9% and 9.4% of the claim’s nominal value after Chapter 11 resolution.
    • May obtain an additional cash payout, with a potential total recovery of 25%, depending on Restricted Funds availability.
  • Creditors with approved unsecured claims at the SAS Consortium:

    • Foresee an initial recovery rate of 1.7% to 2.7% of the claim’s nominal value post-Chapter 11.
    • Subsequent distributions could increase recovery to 7.7%, with the possible release of Restricted Funds.
    • Smaller creditors with claims not exceeding USD 1.499 million may receive a 10% cash reimbursement upon emergence.
  • Stakeholders of general unsecured claims with entities under the Gorm Blue entities (Dark Blue, Deep Blue, Light Blue, Ocean Blue, and Sky Blue Limited):

    • Initial return is projected to be between 0.8% and 1.2% of the claim’s nominal value after Chapter 11 emergence.
    • An additional up to 2.5% could be distributed, bringing the total possible recovery to a maximum of 3.7%, pending the availability of Restricted Funds.
  • Claimants with approved general unsecured claims in Scandinavian Airlines of North America Inc.:

    • Expected recovery ranges from 0.5% to 1.5% of the nominal claim value after the Chapter 11 process concludes.

Understanding the Recovery Predictions and Potential in SAS AB’s Restructuring

Creditor recovery in the SAS AB restructuring plan hinges on several critical factors. Each creditor’s claim against a specific debtor and any supporting guarantees can significantly influence the outcome. Particularly, holders of SAS AB’s publicly traded hybrid bonds see their potential recovery closely tied to a mix of complex elements. These elements include the volatile SEK/USD exchange rate and shifts in the eligible creditor groups’ profile and claims. Additionally, the resolution of potential State non-tax claims plays a crucial role.

SAS has restructured its framework to accommodate a new equity injection, projected at USD 75 million. This cash infusion accounts for approximately 13.6% of SAS’s equity, not factoring in potential changes from convertible debt. This capital boost primarily benefits certain classes of unsecured creditors such as:

  • Government entities from Denmark, Norway, and Sweden
  • Active business associates, including aircraft leasing companies and pilot unions
  • Key suppliers and other creditors that form the SAS Consortium

Creditors who possess hybrid bonds or hold smaller claims can expect to receive their recovery strictly in cash.

Timeline and Contingencies in the SAS AB Chapter 11 Proceeding

SAS AB Focuses on Successfully Navigating Chapter 11 with a Planned Endorsement and Active Stakeholder Engagement

As SAS AB tackles the complexities of Chapter 11, a clear strategy emerges. By February 6, 2024, the airline aims to secure approval for its Chapter 11 Plan and Disclosure Statement. Though subject to changes and legal confirmation, these documents set the stage for the company’s recovery. The company targets the year’s first quarter for court approval of its restructuring approach.

Key influencers, such as the Official Committee of Unsecured Creditors, champion the acceptance of SAS AB’s plan. Their significant backing highlights the widespread support for the company’s turnaround.

Realizing SAS AB’s Chapter 11 Plan depends on meeting specific conditions. These include obtaining court approval and regulatory permissions and successfully reorganizing the parent company. Upon satisfying these key requirements, SAS AB anticipates a strong comeback from Chapter 11 by mid-year 2024. The targeted emergence reflects the company’s commitment to financial stability and operational efficiency.

Resources for Monitoring SAS AB’s Chapter 11 Developments

Stakeholders can access comprehensive information about SAS AB’s Chapter 11 progress through SAS’ specialized restructuring portal at

For legal documentation and US process-related filings, Kroll Restructuring Administration LLC has established a platform at

Additional assistance is obtainable through their helpline and email, catering to North American and international inquirers.

Expert Advisory Roles in the Restructuring of SAS AB

Leading the coordination of SAS’ multilayered restructuring advice is Weil, Gotshal & Manges LLP, supported by Mannheimer Swartling Advokatbyrå AB on Swedish legal matters. Investment banking insights are provided by Seabury Securities LLC and Skandinaviska Enskilda Banken AB, with Seabury Securities also contributing as a restructuring advisor. Castlelake, L.P.’s advisors are the legal team of Skadden, Arps, Slate, Meagher & Flom LLP, Rothschild & Co’s banking advice, and aviation guidance from SkyWorks Holdings LLC.

Air France-KLM relies on legal assistance from White & Case LLP, Paul McGeown, and Sheppard, Mullin, Richter & Hampton LLP, while Lind Invest ApS combines legal advisement from Bech-Bruun Law Firm and US-specific counsel from Latham & Watkins LLP. The Unsecured Creditors’ Committee enlists Wilkie Farr & Gallagher LLP for legal advice, Jefferies LLC for banking expertise, AlixPartners, LLP for financial strategies, industry analysis from Alton Aviation Consultancy LLC, and regional legal insights from DLA Piper LLP.

people inside a commercial airplane
IATA: All Regions Show Strong Growth In Airline Passenger Demand

The International Air Transport Association (IATA) reported a significant increase in global airline…

Read More
PLAY’s Revenues Increased 66% Compared To Q1 Last Year

Fly Play hf. has published its financials for the first quarter of 2024. The airline experienced sub…

Read More
Finnair: Strikes Hurt Q1 Revenue & Result

Finnair reports on Q1 yields and operating cash flow remained good. Strikes hurt revenue and result.…

Read More
Norwegian Group Airlines Served 1.8 Million Passengers In March

In March, Norwegian had 1,544,289 passengers, while Widerøe had 276,413 passengers, totaling 1,820,7…

Read More
Finnair Sees Drop In Passengers, Rise In Cargo in March

Finnair’s year-on-year passenger traffic figures declined, but cargo figures improved.  Finnai…

Read More
Swedavia Airports Greeted Almost 2.5 Million Passengers In March

March saw a rise in travelers using Swedavia’s airports, reaching nearly 2.5 million passenger…

Read More
Copenhagen Airport Revenue Rises By 15% With Strong Passenger Demand

Copenhagen Airport reported a pre-tax profit of DKK 398 million ($56.9 million) for 2023, signaling …

Read More
AEGEAN Posts €168,7 Million Profit In 2023 With 15+ Million Passengers

AEGEAN delivers strong operating results and profitability in 2023, with 3 million more seats offere…

Read More
cabin of aircraft with passengers on board
IATA Reports Strong Air Travel Demand Strong In January

The IATA January 2024 passenger traffic report shows strong global demand for air travel. “2024 is o…

Read More
Norwegian Group Reports Strong February With 1.5m Passengers

Norwegian Group has published its February results, showing passenger growth and benefits from integ…

Read More
Strong Start For Air Cargo In 2024, IATA Reports

The International Air Transport Association (IATA) reported an impressive increase in global air car…

Read More
IAG Full Year 2023 Financial Results Show Strong Growth

The International Airlines Group (IAG) has published its full-year 2023 financial results, showing a…

Read More
Qantas Group Profit Drops 13% In H1 FY24

Qantas Group has published its HQ FY24 results, showing a 13% drop in profits partially offset by fr…

Read More
Qantas Reveals New A220 Cabin And Wi-Fi Plans

Qantas Group has presented its H1 2024 update while updating fleet plans, revealing the new A220 cab…

Read More
Malaysia Airlines Picks Thales Flight Safety Systems For A330neo

Malaysia Airlines Enhances A330neo Fleet with Thales Avionics for Improved Safety and Navigation Mal…

Read More
Emirates Is Hiring Cabin Crew: Delight In Luxurious Beauty Hub

Experience the Glamour at Emirates Beauty Hub: Your Perk as an Emirates Cabin Crew in Dubai Attentio…

Read More
SIA Group: Strong Q3 $659 Million Profit As Passengers Surge

SIA Group, which operates both luxury flagship carrier Singapore Airlines and low-cost airline Scoot…

Read More
SWISS Reflects On Strong Impact Of Departing CFO Markus Binkert

SWISS Chief Financial Officer Markus Binkert will leave the company after serving over 19 years. Mar…

Read More

Emirates Launches Daily Dubai-Miami-Bogotá Flights

Emirates has begun services to Bogotá, expanding its South American network to four destinations and…

Read More
Norwegian Sees 19% Capacity Rise & 16% Passenger Traffic Growth In May 2024

Norwegian had 2,138,484 passengers in May, and Widerøe had 333,492, totaling 2,472,976. Norwegian&#8…

Read More
New Air Transat and Porter Airlines Partnership Offers Expanded Travel Choices

Air Transat and Porter Airlines have begun their joint venture, allowing travelers to book flights t…

Read More
Cathay Holidays Partners With Expedia For One-Stop Travel Hub

Cathay Holidays has launched a new booking site powered by Expedia Group. This site aims to be a pre…

Read More
Porter Airlines Opens New Maintenance Base At Ottawa Airport As Part Of $125 Million Investment

Porter Aviation Holdings Inc. and the Ottawa International Airport Authority are celebrating the gra…

Read More
Finnair ATR
Finnair Adds Winter Flights To Lapland And Norway

Finnair is expanding its operations by increasing flight numbers to key Northern destinations for th…

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

Cookie Consent with Real Cookie Banner