background-defaultbackground-default
logo-pwa

The Nationthailand

Add to Home Screen.

Add
Close
TUESDAY, October 04, 2022
nationthailand
Airline SAS shares hit record low as Sweden says no to more cash

Airline SAS shares hit record low as Sweden says no to more cash

WEDNESDAY, June 08, 2022

The Swedish government said on Tuesday that it will not inject new capital into loss-making airline SAS and does not aim to be a long-term shareholder in the company. The announcement, by Industry Minister, Karl-Petter Thorwaldsson, sent its shares down 14% to all-time lows.

SAS said last week a restructuring plan announced in February depended on it raising 9.5 billion Swedish crowns ($968 million) in cash and converting 20 billion crowns of debt to equity, warning of liquidity problems if it fell short. But no shareholders, including main owners Sweden and Denmark with 21.8% stakes each in the carrier, have committed to the plan.

Thorwaldsson said he would, however, propose to parliament that SAS be allowed to convert the debt it owes to the government into equity capital. Long-term, the government still wants to exit SAS altogether, he added, reiterating a years-long stance.

The airline said in a statement that Sweden's decision to support the debt conversion was an important step for a transformation to succeed. CEO, Anko van der Werff said last week that to attract new investors, SAS must slash costs for leased planes that stand unused due to the closed Russian airspace and slow recovery in Asia.

Denmark's finance ministry was not immediately able to comment. The Danish government has said before it sees itself as a long-term owner of the group.

Sweden has over recent decades injected 8.2 billion crowns ($834 million) into the airline, including via loans to rescue the company from collapse during the COVID-19 pandemic when global air travel drew to a near halt.

The carrier was already struggling before the pandemic in the face of growing competition from low-cost carriers such as Ryanair and Norwegian Air and has sought deals with labour unions on cost cuts.