The Swedish Government has announced that it will not inject additional new capital into SAS but has confirmed that it will support the airline’s intention to convert its debt holdings into SAS equity. SAS plans to convert debt to equity to raise 9.5 billion Swedish crowns in cash.
The Swedish government has lent a total of 8.2 billion Swedish crowns ($834 million) over the 20 years, which includes rescue loans during the pandemic.
Petter Thorwaldsson, the Swedish Minister for Business, Industry and Innovation said: "We want to be clear that we will not inject new capital into SAS in the future.” He added that he would propose to parliament that SAS should be allowed to convert debt it owes to the government into equity capital
SAS called this decision an “important step toward the success of the transformation plan, SAS FORWARD”.
SAS FORWARD includes burden sharing components that SAS believes will allow the airline to become a competitive player in the European airline industry, by attracting the necessary new equity capital to restore its liquidity, deleverage its balance sheet and investing in a new fleet of aircraft.
The Danish government has yet to respond to the restructuring plan.