The Swedish state stops injecting cash into the Scandinavian company SAS, still in deficit – La Tribune.fr

A big blow for the Scandinavian airline SAS (Scandinavian Airlines System), after the announcement by the Swedish government on Tuesday that it would not participate in its new capital increase, while the company transport is in bad financial shape and is banking on its plan called “SAS Forward” (“Forward, SAS”) to revive itself. This announcement of course immediately caused the already very low SAS share price to drop by some 10% around 09:00 GMT on the Stockholm Stock Exchange, to 0.68 crowns (SEK). “We want to be clear that we will not inject fresh capital into SAS in the future,” Industry Minister Karl-Petter Thorwaldsson said. And to clarify: “Because of the mandate of the government to reduce its participation, we say no to a capital injection in the SAS Forward plan” (…) “This implies that the participation of the (Swedish) State in SAS in all likelihood will decrease and that the state clearly is not a long-term shareholder in SAS,” he said at a press conference. A company under state infusion for years Today, Sweden with Denmark are by far the main shareholders of the company, with 21.8% of the capital, a share which has increased over the past two years due to plans aid launched in the context of the Covid-19 epidemic. Sweden, meanwhile, has pumped 8.2 billion Swedish kronor (780 million euros) into the airline over the past few decades, including through loans to save the group from bankruptcy during the pandemic. The airline said on May 31 that it hoped to convert some of its debt into equity to raise 9.5 billion Swedish kronor, but warned of liquidity problems if it failed to do so. In fact, on Tuesday, this option was retained by the Swedish state since Industry Minister Karl-Petter Thorwaldsson declared that he would propose to Parliament to authorize SAS to convert its debt to the government into shares. Following which, SAS thanked the Swedish state in a statement for the financial support provided in recent years and described as an “important step forward” the state’s approval to convert debt into shares. For the record, the Norwegian State exited the capital of SAS in June 2018 by liquidating its residual stake of 9.88%. “SAS Forward”, the last chance plan? Last week, the company announced an upcoming fundraising round of 9.5 billion Swedish crowns (about 900 million euros) and that it wanted to convert into shares debts of some 20 billion crowns. This project is in addition to “SAS Forward”, its savings plan launched in February, which thus completes a series of fundraisers started in 2020 to save the aviation sector from bankruptcy during the pandemic. In 2020, the company had notably reduced its workforce by 40% by eliminating 5,000 positions. In the second quarter, SAS had announced new losses of 1.5 billion crowns (about 150 million euros) against 2.4 billion crowns in the same period last year. During the stock market on Tuesday morning, SAS is now worth less than 500 million euros.