SAS has agreed a 14.25 billion Swedish crown ($1.5 billion) plan with top shareholders including Sweden and Denmark to shore up its finances against the collapse in air travel during the COVID-19 pandemic.
“This is well in line with what we have been thinking we need to get through this, and to restore our funds to something resembling what it was before the crisis,” CEO Rickard Gustafson told Reuters on Tuesday.
Elsewhere, Germany is set to take a 20% stake in Lufthansa while Norwegian Air recently completed a 12.7 billion Norwegian crown ($1.30 billion) debt conversion and share sale.
SAS’s plan includes a deeply discounted share issue to its main owners and a broader rights issue, as well as new hybrid notes and the conversion of bonds.
“For current shareholders, it is a choice between the plague and cholera. If you do not join and subscribe for new shares, a massive dilution will occur,” said Nordnet analyst Per Hansen, pointing to the rights issue price of 1.16 crowns per share, which compares with Monday’s closing price of 8.88 crowns.
The airline, which Gustafson said would have 35-40 planes in the air this summer against around 150 normally, does not see traffic returning to near pre-pandemic levels until 2022.