Apollo seeks to acquire a majority stake in SAS

Apollo Global Management, an American private equity firm operating globally, plans to seek approval from Danish and Swedish regulators to take a majority stake in multinational carrier Scandinavian Airlines System (SAS), Reuters reported today.

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Chapter 11: SAS files for bankruptcy protection

Last July, the airline filed for bankruptcy protection in the United States under Chapter 11 of the Bankruptcy Act. Its main objective was to reduce costs and debt following the failure of wage negotiations with its pilots.

At the time, the company reported that the move was «the next step in the business transformation plan». The airline received approval and was able to continue operating normally while the process was underway.

Since then, SAS, which has its main base of operations at Copenhagen-Kastrup Airport (CPH), has lost almost 60% of its value.

See also: SAS moves forward in Chapter 11 process and receives authorisation to continue its business

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The Apollo loan

In September 2022, the Southern District Bankruptcy Court for New York approved a 700 million dollars DIP financing credit agreement through funds managed by Apollo.

Only companies that have filed for bankruptcy protection under Chapter 11 of the Bankruptcy Act and are going through the process are eligible for this type of financing.

The American firm could now become a majority shareholder in SAS and convert that loan into equity at the end of the process.

According to confidential sources quoted by Reuters, the deal would test European Union regulations, which prevent a non-EU player from owning more than 50% of an airline. However, much of Apollo’s capital comes from investors based in Europe, so the fund is hoping to win approval.

While no final decision has yet been made, one source said the deal could be completed before the end of the year. European authorities would be involved, although national regulators would be responsible for granting final approval.

Any deal would need the support of Denmark and Sweden: each owns about 22% of the company. The rest is controlled by private shareholders.

See also: SAS closes 700 million dollars financing deal with private equity firm