Asset sales helped the SAS Group to further strengthen its long-term liquidity position during the third quarter period to 31 July 2013 but the Scandinavian company does not rule out debt issuance in the final quarter of this year.
SAS tapped the bond market with a €35 million ($46 million) private placement in July and the 80% sale of Norwegian regional carrier Widerøe to group of investors led by the Torghatten firm, which is expected to closed later this month, has improved its liquidity position by about SKr3 billion.
“The third quarter strengthened SAS financially and further improvement of the financial position is expected in the last quarter,” says the company in a statement.
The group says it “evaluating the prerequisites” for further bond loans as it continues to pay upcoming maturing debt.
For the nine-month period to 31 July, the company raised SKr1.3 billion in new loans while repayments totalled SKr1.4 billion.
In June SAS amended a €366 million credit facility following approval of the sale of its regional operation Widerøe by the Norwegian competition authority.
The airline group has turned its revolving credit facility into an SKr3.5 billion ($540 million) amortising credit facility. The facility is divided into two tranches, with separate conditions for drawdown. Maturity is due on 31 March 2015.
As planned the divestment of Widerøe has reduced the credit facility to SKr2 billion. One tranche will be due on 1 June 2014, and the second on 31 March 2015.
SAS Group’s cash and cash equivalents amounted to SKr3.24 billion at the end of the third quarter compared with SKr2.29 billion at 31 July 2012.
During the quarter net cash flow amounted to SKr179 million while in last year’s corresponding period, the group used SKr1.07 billion cash flows.
SAS Group said the 80% divestment of Wideroe will generate SKr 2 billion while the sale of a total of 10 Bombardier Q400s to the Norwegian operator will benefit the group’s liquidity by another SKr1 billion.
In addition the Scandinavian company closed during the three-month period a SKr500 million six Boeing 737-600s sale and leaseback transaction with Deucalion Capital X and Engine Lease Finance with leases running between four to five-and-a-half years.
The transaction followed the SKr738 million ($120 million) sale and leaseback of 19 spare engines with two lessors Willis Mitsui Engine Support and Engine Lease Finance in February.
At 31 July 2013 financial net debt decreased SKr758 million to SKr5.79 billion.