By Dominic Chopping
STOCKHOLM–SAS AB said Tuesday that it has filed for chapter 11 bankruptcy protection in the U.S. as it seeks to push through its comprehensive financial restructuring to cut costs and raise capital under the supervision of the U.S. court system.
Struggling with high debt and a lack of cash, SAS (OME:SE:SAS) earlier this year launched plans to cut annual costs by 7.5 billion Swedish kronor ($725.2 million), convert around SEK20 billion of debt and hybrid notes into common equity and raise at least SEK9.5 billion in new capital.
The Scandinavian airline has also been hit by a pilot strike that started Monday and it expects around 50% of its daily scheduled flights to be cancelled, affecting around 30,000 passengers a day.
“SAS has… been preparing for the option to utilize court restructuring proceedings in order to address the company’s financial situation,” SAS Chairman Carsten Dilling said.
“The ongoing strike poses significant challenges to our ability to succeed with our transformation. The board has concluded that legal tools are required to make progress in our ongoing negotiations with key stakeholders, and ultimately to succeed in making SAS a competitive and financially strong business,” he said.
SAS said it expects to complete its court-supervised process in the U.S. in 9-12 months.
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