EU Clears €1B Plan To Save Virus-Hit Airline SAS

EU competition regulators on Monday, August 17, cleared a €1 billion (US$1.19 billion) plan by Denmark and Sweden to recapitalize virus-hit SAS, stating the measure would prevent the Scandinavian airline’s insolvency.

The plan is part of a larger recapitalization package which will result in private investors holding a significant stake in SAS following the conversion of outstanding privately-held debt instruments into equity.

The European Commission stated the measure will not exceed the minimum needed to ensure the airline’s viability and will not go beyond restoring its capital position before the coronavirus.

“Denmark and Sweden will receive an appropriate remuneration for the investment, and there are additional mechanisms to incentivise SAS to redeem the States’ equity participations and the new State hybrid notes obtained as a result of the recapitalisation,” the EU competition enforcer said in a statement.

The measures were approved as part of a temporary EU State aid regime adopted during the coronavirus outbreak, which aims to help virus-hit companies cope with liquidity and solvency issues.

Full Content: Europa

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