Denmark is ready to write off the debt of the loss-making airline SAS and inject more capital, provided that private investors also make a contribution, Finance Minister Nicolai Wammen said on Friday.
The airline, which is struggling to cut costs and stave off a pilots’ strike, rose as much as 45 percent after the news. It later pared some gains to trade 25 percent higher early Friday afternoon.
“We envision having an ownership interest between 22 percent and up to 30 percent,” Mr Wammen told reporters after meeting with MPs. The state owns 21.8 percent of the SAS.
“There is a commitment from a large and broad majority in Parliament that we want to continue to take responsibility and contribute to a solution, but now all other parties must also do their part,” he said.
Lawmakers have agreed to accept write-downs, convert debt and inject new equity contingent on the participation of private investors, the Treasury Department said in a statement.
“If SAS fails to convince the markets that they have a viable and profitable future, there will be no money from the market or from the Danish state,” said Rasmus Jarlov of the Conservative Party.
State support is also dependent on SAS being able to influence a number of decisions to ensure that SAS retains a strong presence at, for example, Danish airports, which is important for the Danish economy and ensures good travel connections to the rest of the world. said Herr Wammen.
Copenhagen Airport is the airline’s largest hub and is strategically and economically important to Denmark.
The state’s demand for influence is likely to deter many investors, said Sydbank analyst Jacob Pedersen.
“I absolutely don’t think this makes the rescue of SAS any easier. Big consortia that might otherwise want to jump in and make changes to SAS will run away screaming,” he said.
https://www.independent.ie/business/world/denmark-considers-sas-rescue-package-41741461.html Denmark considers rescue package SAS