Airline SAS rescue plan on track as bondholders accept conversion
Adds detail, background
STOCKHOLM, Oct 23 (Reuters) - Scandinavian airline SAS SAS.ST said on Friday bondholders had subscribed for 56.4% of shares in a bond conversion offering that is a key part of a rescue plan aimed at seeing it through the collapse in air travel caused by the coronavirus pandemic.
The offer was to holders of 2.25 billion Swedish crowns ($256 million) of bonds coming due on Nov. 24, 2022.
The airline said in a statement the remainder of the bonds were converted into new hybrid notes in an aggregate amount of 1.62 billion crowns and that, with the outcome of the bond conversion offering, the wider recapitalisation plan was now on track to be implemented.
SAS said on Wednesday a 4 billion crown rights issue also part of the rescue plan was fully subscribed.
"The results of the two share issues show that investors have not queued up to buy SAS shares, and that the states have helped SAS get the rights issue fully subscribed," Sydbank analyst Jacob Pedersen said.
"We anticipate sales pressure in the SAS share when the new shares can be sold," he said in a note to clients, repeating a "sell" recommendation on the company's shares.
The recapitalisation plan was announced in June, and was subsequently tweaked in order to get debt holders' approval for conversions on which SAS' main owners - the governments of Sweden and Denmark - had conditioned their cash injections.
The recapitalisation plan in total restores SAS' equity by 14 billion crowns and dilutes shares by 95%.
($1 = 8.7899 Swedish crowns)
(Reporting by Anna Ringstrom, editing by Gwladys Fouche and Niklas Pollard)
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