SAS reaches agreements to amend the phrases of present plane and gear lease agreements

SAS AB has introduced that it has reached agreements with 10 lessors, representing in combination 36 plane, to amend the phrases of present plane and gear lease agreements. The agreements represent an vital step in reconfiguring the fleet and reaching the SEK 7.5 billion in annual price financial savings beneath the SAS FORWARD plan. The amended lease agreements are topic to approval by the U.S. Chapter Court docket for the Southern District of New York (the “Court docket”), and to the plan of reorganization within the chapter 11 course of changing into efficient.

The amended lease agreements have been entered into with 10 lessors – AerCap Holdings N.V., Aergo Capital Restricted, Aircastle Restricted, ALAFCO Aviation Lease and Finance Firm, Avolon Aerospace Leasing Restricted, CDB Aviation, Dubai Aerospace Enterprise (DAE) Ltd., ICBC Aviation Leasing Co., Ltd., ORIX Aviation Methods Restricted and SDH Wings Worldwide Leasing Restricted – representing in combination 36 plane, together with 3 vast our bodies and 33 slender our bodies, in addition to sure gear associated thereto.

By way of the amended lease agreements, SAS is effectively on observe in reaching the focused annual price financial savings of no less than SEK 850 million to 1.0 billion in diminished plane lease and capital prices, which constitutes an vital step in reaching the SEK 7.5 billion in annual price financial savings by fiscal 12 months 2026 beneath the SAS FORWARD plan. The Firm intends to proceed negotiations with sure different of its lessors to realize additional amendments in present lease agreements.

Anko van der Werff, President and Chief Government Officer of SAS, says:

“We proceed to make progress in our chapter 11 course of. The amended lease agreements permit us to reconfigure our fleet and enhance our price construction, which is a key aspect of our SAS FORWARD plan. We’re grateful to our lessors for working constructively with us, as we proceed taking vital actions to turn into a extra aggressive airline and a stronger enterprise companion to them. We’re persevering with to pursue extra lease amendments so we are able to obtain our targets.”

On July 5, 2022, to speed up the implementation of its complete enterprise transformation plan SAS FORWARD, SAS introduced that it had voluntarily filed for chapter 11 within the U.S., a well-established and versatile authorized framework for restructuring companies with operations in a number of jurisdictions. By way of this course of, SAS goals to achieve agreements with key stakeholders, restructure the Firm’s debt obligations, reconfigure its plane fleet, and emerge with a big capital injection. The SAS FORWARD plan encompasses elevating no less than SEK 9.5 billion in new fairness capital in addition to decreasing or changing SEK 20 billion of debt into frequent fairness (of which a majority is on-balance sheet debt), together with state hybrid notes, business hybrid notes, Swiss bonds, time period loans from states, plane lease liabilities and upkeep contract obligations and different executory contract obligations. The brand new fairness elevate and debt-to-equity conversions contemplated as a part of SAS FORWARD will entail very substantial dilution to present shareholders. SAS targets to finish its court-supervised course of within the U.S. inside 12 months from the graduation of the chapter 11 course of in July 2022.

Prime Copyright Picture: Scandinavian Airways-SAS Airbus A320-251N WL SE-ROL (msn 9352) RHO (Andi Hiltl). Picture: 959026.

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