Scandinavian Airlines System (SAS) confirmed the signing of a 700 million dollars debtor-in-possession (DIP) financing credit agreement with Apollo Global Management, an American private equity firm operating globally.
Only companies that have filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Act and are going through the process are eligible for this type of financing. Such is the case for the Scandinavian carrier, which completed the necessary filing with the relevant court in early July.
Together with the cash generated from ongoing operations, the new money inflow will allow the airline to continue to meet its obligations while the proceedings continue, the company said in a statement. This financing, however, must be approved by the Bankruptcy Court for the Southern District of New York. The company expects the approval to become effective in mid-September.
The company selected Apollo Global Management’s proposal after a process of studying each of the alternatives. In that sense, SAS assured that its conditions “are at market terms”. The aid is structured as a delayed draw term loan with a nine-month maturity from the closing date. It may be deferred gradually up to a maximum term of 18 months.
“We are pleased to have secured this financing commitment”, said Carsten Dilling, Chairman of the company’s Board of Directors. “With this financing, we will have a strong financial position to continue supporting our on-going operations throughout our voluntary restructuring process in the United States”, he added.
“Scandinavian Airlines is one of Europe’s leading airlines and we are pleased to support the business operations as they implement their restructuring plans to emerge a stronger company”, said Antoine Munfakh, Partner at Apollo Global Management.
See also: SAS moves forward in Chapter 11 process and receives authorisation to continue its business
