Airline SAS shares hit record low as Sweden says no to more cash & More News Here

Scandinavian Airlines (SAS) Airbus A320 planes are parked at Copenhagen airport in Kastrup, Denmark, March 15, 2020. TT News Agency/Johan Nilsson by way of REUTERS ATTENTION EDITORS

STOCKHOLM, June 7 (Reuters) – The Swedish authorities is not going to inject new capital into SAS (SAS.ST), its business minister stated on Tuesday, dealing a blow to the loss-making airline’s restructuring efforts and sending its shares down 14% to all-time lows.

SAS stated final week a restructuring plan introduced in Feburary trusted it elevating 9.5 billion Swedish crowns ($968 million) in cash and changing 20 billion crowns of debt to fairness, warning of liquidity issues if it fell quick. learn more

But no shareholders, together with principal homeowners Sweden and Denmark with 21.8% stakes every within the provider, have dedicated to the plan.

“We want to be clear that we will not inject new capital into SAS in the future,” Sweden’s Karl-Petter Thorwaldsson advised a information convention.

The minister stated he would, nevertheless, suggest to parliament that SAS be allowed to convert debt it owes to the federal government into fairness capital. Long-term, the federal government nonetheless desires to exit SAS altogether, he added, reiterating a years-long stance.

The airline stated in an announcement that Sweden’s choice to assist the debt conversion was an necessary step for a change to succeed.

Sweden has over current many years injected 8.2 billion crowns ($834 million) into the airline, together with by way of loans to rescue the corporate from collapse throughout the COVID-19 pandemic when international air journey drew to a close to halt.

The provider was struggling already earlier than the pandemic within the face of rising competitors from low-cost carriers such as Ryanair (RYA.I) and Norwegian Air (NAS.OL), and has sought offers with labour unions on value cuts.

“The Swedish decision puts serious pressure on creditors and employees to enter into agreements,” Sydbank analyst Jacob Pedersen stated in a be aware to shoppers.

“If the company can’t attract capital, because Sweden and possibly Denmark won’t invest more money, this risks being a step on the way to the grave,” stated Pedersen, who holds a promote score on the inventory which has dropped 67% year-to-date.

Denmark’s finance ministry was not instantly in a position to remark. The Danish authorities has stated earlier than it sees itself as a long-term proprietor within the group.

CEO Anko van der Werff stated final week that to entice new buyers, SAS should slash prices for leased planes that stand unused due to the closed Russian airspace and gradual restoration in Asia.

SAS will not be alone in preventing to get again on its toes after the pandemic. Another provider searching for shareholder backing is Air France-KLM (AIRF.PA) which in May launched a 2.3 billion euro ($2.4 billion) share sale. learn more

($1 = 9.8127 Swedish crowns)

Reporting by Anna Ringstrom in Stockholm and Stine Jacobsen in Copenhagen, further reporting by Terje Solsvik; enhancing by Louise Heavens, Jason Neely and Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.

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