Airline SAS bondholders back key element of rescue plan

STOCKHOLM: SAS said on Wednesday that its recapitalisation plan, aimed at seeing it through the collapse in air travel caused by the pandemic, was progressing according to plan after bondholders agreed to back a debt to equity conversion.

The airline, part-owned by Sweden and Denmark, had sought support among bondholders for the conversion on which the owners' cash injections for the 14 billion Swedish crown ($1.61 billion) recapitalisation plan hinge.

SAS agreed the plan with its top shareholders in June, but was forced last month to revise terms of the proposed debt to equity swap in an attempt to secure the agreement of enough debtholders, a condition for unlocking cash injections from Sweden and Denmark.

Terms were tweaked for the conversion of 1.5 billion crowns of hybrid notes into common shares, and an option was introduced for holders of a 2.25 billion crown bond to accept either new commercial hybrid notes or shares.

SAS said investors representing 82% of the nominal amount of hybrid notes, equivalent to 97.72% of the votes cast at Wednesday's noteholders meeting, and 74% of the nominal amount of bonds, or 99.17 percent of the votes cast at the meeting, had voted in favour of the conversions.

"The proposed conversions have consequently been approved," it said in a statement.

At least 80% of the attending nominal amount of the bonds, and at least two thirds of that of the hybrid notes, had to vote in favour for the swaps to go ahead.

"The implementation of SAS' recapitalisation plan will proceed in accordance with the timeline and on the terms communicated in SAS' press release on 14 August," it said.

The recapitalisation plan, key to securing the future for the struggling company, also requires approval at an extraordinary shareholders' meeting on Sept. 22.