SAS remains on course to exit Chapter 11 bankruptcy protection in the new year after a US court approved a $1.2 billion investment from a consortium led by Air France-KLM.
The US bankruptcy court in New York authorised the investment deal by the group which also involves private equity firm Castlelake and the Danish government.
The investment comes in the form of $475 million in equity in the reorganised Scandinavian carrier and $725 million of convertible debt.
The court also agreed a $500 million financing credit agreement with Castlelake as a bridge to the final emergence from Chapter 11.
SAS now aims to receive approval from the court of the Chapter 11 plan in early 2024, to be followed by obtaining regulatory approvals and the implementation of a Swedish company reorganisation.
The airline filed for bankruptcy protection in July 2022 to enable financial restructuring under a scheme called SAS Forward after warning that a strike by 1,000 pilots had put its future at risk.
Responding to the latest court announcement, SAS president and chief executive Anko van der Werff said: “The investment agreement that was approved by the court today is a key milestone in our SAS Forward plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.”
The Air France-KLM deal will see SAS leave the Star Alliance and join rival SkyTeam.