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Scandinavian airliners, SAS finally hit a bump and now relies on owners for survival

Friday, 09 November 2012
Things are not looking so bright for the ailing Scandinavian airliners, SAS, as creditors don't trust SAS's ability to pay back.

This is why the six banks that have agreed to extend SAS billion loan are now seeking the government 's that own the company, Sweden, Norway and Denmark guarantees that they'll stand as collateral before any more money will flow to the company.

Reports how hold that the governments of the three countries which own SAS have now requested the EU's approval.

Thursday's notice of delayed quarterly report from SAS is said to be due to that the three governments want the EU approval for the state guarantees of Skr4.7 billion, so they'll be not considered unfair state aid to the company.

A rights issue may also be possible, but multiple sources told Swedish business daily, Dagens Industri that it is impossible, given the two previous rights issues that governments set up. At one of these issues, Norwegian, which is a very staunch competitor protested, saying that it was unfair and a form of state aid.

The six banks that agreed to extend the loans are Danske Bank, DNB, Nordea, Royal Bank of Scotland, SEB and Swedbank. Only Handelsbanken withdrew from the negotiations. The Swedish Minister for Financial Markets, Peter Norman has put severe pressure on the banks to extend loans. Now it seems the banks in turn have negotiated a guarantee that the states will pay back the loans if the SAS go bankrupt, according to Dagens Industri.

For the loans to be extended, however, it also requires that the SAS cost savings of Skr3 billion locked in. Sources close to the paper, says that the unions will accept it, and thus the layoffs, pay cuts and deteriorating working conditions will be considered by them as a new ways of life.
Scancomark.com Team

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