Scandinavian Airlines (SAS) has filed a second amended Chapter 11 reorganisation plan, which will see a recovery of around $325m for general unsecured creditors and aims to see the company emerge from the process in mid-2024.
The plan, filed with the US Bankruptcy Court for the Southern District of New York, comes after the airline gained the support of the Official Committee of Unsecured Creditors and could see the company emerge from the process after filing for bankruptcy protection in mid-2022.
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About $250m of the recoveries will be cash with the other $75m consisting of new equity for the previously announced investors, continuing the airline’s expectation that there would only be a modest recovery for general unsecured creditors.
The airline has been cautious to point out that there will be no value for existing shareholders from the reorganisation, with all of its common shares and listed commercial hybrid bonds to be cancelled, redeemed, and delisted in connection with its emergence from the Chapter 11 process.
SAS said that it expected that holders of its listed commercial hybrid bonds would receive an initial cash recovery of 6.9%-9.4% of the nominal value of claims after the process, with the possibility of receiving an additional distribution of up to 13.1%-15.6% of the nominal value after the potential release of around $213m in Restricted Funds, which could also be distributed to general unsecured creditors once released.
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The update outlines further details about a plan announced in October, when SAS confirmed a consortium involving Air France-KLM, Lind Invest, and Castlelake would be involved in its $1.2bn restructuring process.
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