Scandinavian Airline shares plunge to 95pc wipeout
Copenhagen | SAS shares slumped by as much as 95 per cent on Wednesday after the airline announced a financial restructuring on Tuesday to prevent bankruptcy, bringing on board big new investors and wiping out the stakes of its more than 250,000 owners.
SAS stock is now almost worthless. AP
Scandinavia’s biggest carrier filed for bankruptcy protection in the United States in mid-2022 after years of struggling with high costs coupled with low customer demand exacerbated by the coronavirus pandemic.
SAS said US investment firm Castlelake and Air France-KLM would become new major shareholders alongside the Danish state, and that the airline’s stock would be delisted from the Stockholm, Copenhagen and Oslo exchanges.
Air France-KLM, for whom the deal is the first since the group consolidated almost 20 years ago, said it would aim to tie SAS flights into those of its own airlines in its Amsterdam and Paris hubs to strengthen its Nordic presence.
“Air France-KLM is determined to play an active role in the consolidation of European aviation,” it said.
Castlelake will take a stake of about 32 per cent, Air France-KLM will own around 20 per cent, Danish investor Lind Invest 8.6 per cent and the Danish state about 26 per cent, SAS said. The remaining equity would probably be distributed among creditors, it said.
Shares in SAS, which have tumbled in recent years, traded down 83 per cent at 1144 GMT to 0.05 Swedish crowns ($0.0072).
Sydbank analyst Jacob Pedersen said the fact that the shares still traded at any residual value could be explained by the potential for legal challenges or investor “overconfidence”.
“Management itself has come out to say there was a risk that the shares will become worthless. Now we know the shares will become worthless,” Mr Pedersen said.
“If you can’t find someone even more opportunistic and risk averse than yourself to sell it to, you will ultimately end up with a loss,” he added.
Reuters
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out moreRead More
Latest In Europe
Fetching latest articles