SAS to raise SKr2b through new share issue

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SAS Group is initiating a SKr2 billion ($307 million) share issue to fund its fleet modernisation and reduce dependence on bank financing.

It is also intending shortly to issue up to SKr2 billion in convertible bonds if it determines that market conditions are suitable.

The trinational company had indicated in January that it might pursue new funding to strengthen its capital base.

Scandinavian Airlines is undergoing a fleet replacement – involving the acquisition of eight Airbus A350s, four A330s and 30 A320neos – and SAS says the preference shares will “primarily” be used to fund the renewal.

SAS Group is still restructuring its operations through the 4XNG plan, an overhaul to cut back the company to its core activities in order to reduce costs. The plan also involves improving the company’s liquidity.

It will offer 4 million preference shares with a subscription price of SKr500. The subscription period will begin on 10 February.

SAS Group will offer 80% of the shares to institutional investors and the remainder to the general public in its three home countries.

It expects to raise SKr2 billion from the issue, if fully subscribed, with costs of around SKr50 million. The issue would take the total number of shares in the company to 333 milion.

SAS Group says that the board could increase the issue to 7 million shares, potentially raising a further SKr1.5 billion.

The company adds that a proposed convertible bond issue is “subject to favourable market conditions”.

SAS Group has also entered a €150 million ($200 million) financing agreement with bank UBS as part of the funding strategy.