European airline SAS tanks 95% after restructuring deal

Shares in Scandinavian airline SAS plunged by 95% as markets opened on Wednesday, after the company announced a restructuring deal late on Tuesday that will see it delisted from exchanges.

Losses have since pared back, with shares last down by around 83% at 7:26 a.m. ET.

The share dive comes after the airline on Tuesday said that U.S. investment firm Castlelake and fellow aviation company Air France-KLM will become the new major shareholders of SAS and hold around 32% and 20% of the company, respectively. The Danish government is expected to own roughly 26% of SAS, whilst Danish investment firm Lind Invest will have a 8.6% stake, according to SAS.

”All of SAS AB’s common shares and listed commercial hybrid bonds are expected to be cancelled, redeemed and delisted,” SAS said in a statement on Tuesday, adding that this process is expected to take place in the second quarter of 2024.

The development follows years of financial difficulties for SAS. The airline filed for bankruptcy protection in the U.S. in July 2022 amid mounting pressures from pilot strikes and low demand in the wake of the Covid-19 pandemic.

SAS also said it would eventually leave airline group Star Alliance, of which it is a founding member, and become part of the Sky Team Alliance, which is associated with Air France-KLM.