SAS has entered into an investment agreement with the winning bidder consortium in its exit financing solicitation process, consisting of Castlelake, Air France-KLM and Lind Invest, together with the Danish state. As part of the agreed transaction structure, SAS has also entered into a new debtor-in-possession (DIP) financing credit agreement for US$500 million (SEK 5.5 billion) with Castlelake to refinance SAS’ existing DIP term loan, increase liquidity, and support SAS’ path to exit from its voluntary restructuring proceedings. The agreements are subject to review and approval by the US Bankruptcy Court for the Southern District of New York.
On October 3, 2023, SAS announced that it had selected the Investors as the winning bidder consortium in its exit financing solicitation process, and that the parties were in agreement on a transaction structure including a total investment in the reorganised SAS corresponding to US$1,175 million (SEK 12.925 billion). The winning bidder consortium has now increased its proposed investment by US$25 million (SEK 275 million) to a total of US$1,200 million (SEK 13.2 billion), which includes US$475 million (SEK 5.225 billion) in new unlisted equity and US$725 million (SEK 7.975 billion) in secured convertible debt, as well as Castlelake providing a US$500 million (SEK 5.5 billion) facility to refinance SAS’ existing DIP financing.
The investment agreement entered into by SAS and the Investors includes the final terms of the Investors’ equity investment, as well as the key terms for the secured convertible debt and SAS’ chapter 11 plan of reorganization.
SAS will seek U.S. Court approval of the investment agreement and the New DIP Financing “as soon as possible in November 2023”.
Anko van der Werff, President & 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.”
Weil, Gotshal & Manges is serving as global legal counsel and Mannheimer Swartling Advokatbyrå is serving as Swedish legal counsel to SAS. Seabury Securities and Skandinaviska Enskilda Banken are serving as investment bankers, and Seabury Securities is also serving as restructuring advisor to SAS. Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel, Rothschild & Co is serving as investment banker, and SkyWorks Holdings is serving as aviation consultant to Castlelake. White & Case, Paul McGeown and Sheppard, Mullin, Richter & Hampton are serving as co-legal counsel to Air France-KLM. Bech-Bruun Law Firm is serving as legal counsel and Latham & Watkins is serving as US legal counsel to Lind Invest.