The Ministry of Trade and Industry enlisted the help of experts to “protect the interests of the state” in the airline stricken by the crisis. Aviation analysts don’t think this means Norway will buy into SAS again.
The news came, on Thursday, that the Ministry of Commerce and Industry received assistance from financial and legal advisors regarding the crisis of the Special Air Service.
The Norwegian state acted as the guarantor of the loan to SAS, and therefore it is an indirect creditor that will now be part of the negotiations on the future of the airline.
SAS itself has made it clear that the company should reduce its debt by SEK 20 billion by converting loans into equity. In addition, the company will raise NOK 9.5 billion in new capital from investors.
Aviation analyst Jacob Pedersen at Danish Sydbank doubts Norway will contribute the money to save SAS.
– I would be very surprised if you entered the Norwegian state again and bought part of SAS.
The Norwegian state has helped, among other things, Norway, and appears to be one of the Nordic countries with the least operational and financial interest in SAS, he tells E24.
The interests of the state must be protected.
The Ministry of Commerce and Industry has appointed brokerage firm ABG Sundal Collier as financial advisor and law firm Wiersholm as legal advisor.
The Ministry provides the following comment on the assistance:
– The Norwegian state is an indirect creditor to SAS through the company that used the Aviation Loan Guarantee Scheme, they wrote in an email to E24 on Friday afternoon.
– ABG and Wiersholm assist the state in their assessments of how best to protect state interests in the process initiated by the SAS. The scope, focus and duration of these engagements will depend on the process, says the communications division, which also says ABG was engaged in a competition in the spring of 2022, to assist the state with aviation. Wiersholm has helped the state with aviation-related legal cases at various times since 2020
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It is unlikely that SAS will end up in China, but perhaps in Cyprus
The state provided a loan guarantee of one and a half billion kroner to SAS during the pandemic. The same was done for the Norwegian.
In the latter company, the previous government also invested 1.2 billion NOK during the refinancing last spring.
A Norwegian loan guarantee means that Norway can become a shareholder in SAS, voluntarily or not. This can happen if the claim becomes part of the debt that has been converted into equity in the crisis plan.
So far, the SAS has not provided a detailed plan on how to deal with the various creditors.
Today, Sweden and Denmark are the main owners of SAS. Each has an ownership stake of 21.8 percent. It is followed by the Swedish Wallenberg family with 3.4%.
Norway has been on the owner’s side for many years, but they are all sold out. The latter shares were sold for just over 600 million NOK in 2018, at the time of the sale they represented nearly ten percent of the company’s shares.
Pedersen at Sydbank discusses the crisis plan at SAS in Monday’s analysis. There it is estimated that Sweden and Denmark may have to invest up to SEK 2 billion each if they want to preserve their holdings.
Pedersen also believes that it will be difficult to bring in new investors.
SAS: – Ongoing discussions
Significant portions of the new capital are likely to come from new investors. We cannot comment on the nationality of any new owners, this process is ongoing, but we can confirm that discussions are ongoing, Director Press Tony Bjerf Sound wrote in an email.
– Moreover, we cannot comment on rumors and speculations about the property, as I wrote.
Read on E24 +
FRP about SAS: – We can’t throw good money after bad
Swedish newspaper Dagens Industri has speculated that a group of foreign investors may be interested in acquiring SAS. SVT has also indicated that Chinese state-owned companies can become owners if the debt is converted into equity.
SAS itself expects a “significant portion” of the NOK 9.5 billion new capital to come from new investors, according to its latest quarterly report.
I think investors will line up
Analyst Lars-Daniel Westby at Sparebank 1 Markets follows the SAS stake.
– Of course, many are interested in getting money in SAS, but they should look at the terms before committing to something. They want to see that the company agrees with the union and has transferred the debt, and they want to look at the pie to distribute and what they’ll get for the money they spit in, he says.
This is far from a done deal, but the money is there if investors are happy with the upside.
Westby asserts that it is the investors who provide the new capital that will set the terms for most of what will happen in the company.
– If you make it to the table, you have a semi-free option for the next problem. There will be many who say they can line up the money.
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Air passengers after the new crisis numbers: – Don’t you dare fly with SAS now
– The Norwegian state provided a loan guarantee of 1.5 billion, and you should think about what to do?
They must do the same as all other creditors, what they must accept and what they will end up doing.
– What is more likely to waste money?
– no one knows. You do not have an overview. The only thing you know is that the hierarchy is such that the new money has the most to say and sits at the top of the table, and the existing shareholders sit at the bottom of it.
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