SAS AB ("SAS " or the "Company") announces that it has reached agreements with two additional lessors, representing 13 aircraft in the aggregate, to amend the terms of existing aircraft and equipment lease agreements. With these agreements,SAS concludes its lessor negotiations as part of the chapter 11 process. In total,SAS has reached agreements with 15 lessors, representing 59 aircraft. Through the amended lease agreements,SAS expects to achieve the targeted annual cost savings of at leastSEK 1.0 billion in reduced aircraft lease expenses and annual cash flow items relating to aircraft financing. This constitutes an important step in achieving theSEK 7.5 billion in annual cost savings by fiscal year 2026 under theSAS FORWARD plan. The new amended lease agreements are subject to approval by theU.S. Bankruptcy Court for the Southern District of New York (the "Court") and to the plan of reorganization in the chapter 11 process being confirmed and becoming effective. As part ofSAS ' comprehensive business transformation plan,SAS FORWARD,SAS set a target for annual cost reductions ofSEK 7.5 billion by fiscal year 2026, as compared to the annual cost base for fiscal year 2019. An important part of the targeted cost reductions, at leastSEK 1.0 billion , are expected to be achieved in reduced aircraft lease expenses and annual cash flow items relating to aircraft financing. Today,SAS announces thatSAS has entered into agreements with two additional lessors -Air Lease Corporation andJackson Square Aviation - representing 13 aircraft in the aggregate, including one wide body and twelve narrow body aircraft, as well as certain equipment related thereto. With these agreements,SAS concludes its lessor negotiations as part of its chapter 11 process, having reached agreements with 15 lessors in total, representing 59 aircraft in the aggregate, including seven wide bodies and 52 narrow bodies. Through the amended lease agreements,SAS expects to achieve the targeted annual cost savings of at leastSEK 1.0 billion in reduced aircraft lease expenses and annual cash flow items relating to aircraft financing, as part of theSAS FORWARD plan. Anko van der Werff, President and Chief Executive Officer ofSAS , says: "We are pleased to announce that we have reached an important step in our chapter 11 process, having concluded negotiations with aircraft lessors. Through these agreements, we expect to achieve our targeted cost reductions related to annual aircraft lease and financing costs, which constitutes important progress in reaching our overall targets in theSAS FORWARD plan. We are grateful to our lessors for working constructively with us. We continue making progress in our transformation journey and in becoming a more competitive airline." As of the date of this announcement,SAS expects its fleet to soon consist of 134 aircraft, of which 35 are contracted through third parties, 22 are owned bySAS and 77 are subject to various financing arrangements. The reconfigured fleet includes 59 aircraft that have been subject to restructuring and 18 aircraft with lease agreement terms that have been determined to be at or better than market levels. Update on Chapter 11 Process - Second Tranche ofSAS ' DIP FinancingSAS is making steady progress in its chapter 11 process and continues to work towards completing the process during the second half of 2023. As stated inSAS ' year-end report for fiscal year 2022, the second tranche ofSAS ' debtor-in -possession ("DIP") financing, amounting toUSD 350 million , was expected to be available for utilization in the first quarter of fiscal year 2023 (November 2022-January 2023).SAS continues to work towards meeting certain conditions under the DIP term loan agreement to access the second tranche of the DIP financing as soon as possible during the second quarter of fiscal year 2023 (February-April 2023 ).SAS continues to have sufficient liquidity to maintain its operations pending the utilization of the second tranche of the DIP financing.SAS will revert with information on the timing of the utilization and the next steps in the chapter 11 process in due course. Additional Information About the Chapter 11 Process and Implementation ofSAS FORWARD OnJuly 5, 2022 , to accelerate the implementation of its comprehensive business transformation planSAS FORWARD,SAS announced that it had voluntarily filed for chapter 11 in theU.S. , a well-established and flexible legal framework for restructuring businesses with operations in multiple jurisdictions. Through this process,SAS aims to reach agreements with key stakeholders, restructure the Company's debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection. TheSAS FORWARD plan encompasses raising at leastSEK 9.5 billion in new equity capital as well as reducing or convertingSEK 20 billion of debt into common equity (of which a majority is on-balance sheet debt), including state hybrid notes, commercial hybrid notes, Swiss bonds, term loans from states, aircraft lease liabilities and maintenance contract obligations and other executory contract obligations.SAS targets to complete its court-supervised process in theU.S. during the second half of 2023, the implementation of which is likely to entail additional legal proceedings in other jurisdictions than theU.S. As a result, there is no assurance that there will be any recovery for the shareholders ofSAS AB . Additional information about the Company's voluntary chapter 11 process is available on the Company's dedicated restructuring website,https://sasgroup.net/transformation. Court filings and other documents related to the chapter 11 process in theU.S. are available on a separate website administered bySAS ' claims agent,Kroll Restructuring Administration LLC , athttps://cases.ra.kroll.com/SAS . Information is also available by calling (844) 242-7491 (U.S. /Canada ) or +1 (347) 338-6450 (International), as well as by email at SASInfo@ra.kroll.com. AdvisorsWeil, Gotshal & Manges LLP is serving as global legal counsel,Norton Rose Fulbright is serving as special aircraft finance counsel, and Mannheimer Swartling Advokatbyrå AB is serving as Swedish legal counsel toSAS .Seabury Securities LLC andSkandinaviska Enskilda Banken AB are serving as investment bankers, Seabury is also serving as restructuring advisor.FTI Consulting is serving as financial advisor. For further information, please contact:SAS Press office, +46 8 797 29 44 Louise Bergström, VP Investor Relations, +46 70 997 0493SAS , Scandinavia's leading airline, with main hubs inCopenhagen ,Oslo andStockholm , is flying to destinations inEurope, USA andAsia . Spurred by a Scandinavian heritage and sustainable values,SAS aims to be the global leader in sustainable aviation. We will reduce total carbon emissions by 25 percent by 2025, by using more sustainable aviation fuel and our modern fleet with fuel -efficient aircraft. In addition to flight operations,SAS offers ground handling services, technical maintenance and air cargo services.SAS is a founder member of the Star AllianceT, and together with its partner airlines offers a wide network worldwide. Learn more at https://www.sasgroup.net ADDITIONAL INFORMATION The press release does not constitute an offer to sell or issue, or the solicitation of an offer to buy or acquire, or subscribe for, shares or any other financial instruments inSAS . This press release contains forward-looking statements that reflectSAS ' current view of future events as well as financial and operational development. These statements may include, without limitation, any statements preceded by, followed by or including words such as "intend", "assess", "expect", "may", "plan", "estimate" and other expressions involving indications or predictions regarding future development or trends and other words and terms of similar meaning or the negative thereof. These forward-looking statements have been prepared for illustrative purposes only, are not based on historical facts, are not guarantees of future performance, reflectSAS ' beliefs and expectations, and are subject to known and unknown risks, uncertainties and assumptions and other factors that could cause actual events and performance to differ materially from any expected future events or performance expressed or implied by such forward -looking statements. As a result of these risks, uncertainties, assumptions and other factors, you should not place undue reliance on these forward-looking statements as a prediction of actual future events or otherwise. The information contained in this press release is subject to change without notice and, except as required by applicable law,SAS does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained in it, whether as a result of new information, future events or otherwise. Nothing in this press release constitutes or should be construed as constituting a profit forecast.
Click here for more information
© Oslo Bors ASA, source