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SAS Falls 95%, Wiping Out The Stockholders Of The Scandinavian Airline

SAS Falls 95%, Wiping Out The Stockholders Of The Scandinavian Airline
After the airline announced a financial restructuring on Tuesday to avoid bankruptcy, enlisting significant new investors and wiping out the stakes of its more than 250,000 owners, SAS shares plunged by as much as 95% on Wednesday.
Midway through 2022, the largest carrier in Scandinavia sought bankruptcy protection in the US after years of struggled with high costs and poor client demand made worse by the coronavirus epidemic.
The shares of the airline will be delisted from the Stockholm, Copenhagen, and Oslo exchanges, according to SAS, which also announced that American investment group Castlelake and Air France-KLM will become new key owners alongside the Danish state.
Since the group's consolidation some 20 years ago, this arrangement is Air France-KLM's first. To increase its Nordic presence, Air France-KLM said it would try to connect SAS flights with those of its own airlines in its hubs in Amsterdam and Paris.
"Air France-KLM is determined to play an active role in the consolidation of European aviation," it said.
According to SAS, Castlelake will possess around 32% of the company, Air France-KLM about 20%, Danish investor Lind Invest 8.6%, and the Danish government about 26%. The remaining shares would probably be divided among creditors, SAS said.
At 1144 GMT, shares of SAS, which have fallen in value recently, were trading 83% lower at 0.05 Swedish crowns ($0.0045).
According to Sydbank analyst Jacob Pedersen, the possibility of legal challenges or investor "overconfidence" could account for the shares' continued trading at any residual value.
"Management itself has come out to say there was a risk that the shares will become worthless. Now we know the shares will become worthless," Pedersen said.
"If you can't find someone even more opportunistic and risk averse than yourself to sell it to, you will ultimately end up with a loss," he added.

Christopher J. Mitchell

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