Norway ready to reclaim stake in troubled SAS airline

Norway said Tuesday it was willing to once again become an owner in struggling Scandinavian airline SAS four years after pulling out.

“Given the situation of the company … we can, on certain terms, accept to convert outstanding debt into shares if we consider this necessary,” Norwegian Trade and Industry Minister Jan Christian Vestre said in a statement.

Norway sold off its stake in the airline between 2016 and 2018.

But it issued a guarantee of 1.5 billion Norwegian kroner ($154 million) to SAS during the pandemic to ensure the airline’s liquidity when it was hit hard by travel restrictions.

“The Norwegian state will not contribute new capital and will not be a long-term owner of SAS,” Vestre insisted.

SAS is also co-owned by Sweden and Denmark which each hold stakes of 21.8 percent.

The Danish government said on June 10 it was prepared to increase its stake in SAS to up to 30 percent and write off debts of 3.5 billion Danish kroner ($500 million).

The Swedish government has said it would not inject more capital into SAS, but would propose to parliament that SAS be authorised to convert the debt it owes to the state into equity capital.

SAS posted a net loss of 1.5 billion Swedish kronor ($150 million) in the second quarter, compared to a net loss of 2.4 billion kronor a year earlier.

Stressing that the company’s survival was at stake, SAS management in February announced a savings plan dubbed “SAS Forward”. In early June, it announced further plans to raise 9.5 billion Swedish kronor ($968 million) in new capital.

It also aims to convert debt worth around $2 billion into shares

SAS said the Norwegian government’s announcement “is appreciated and an important step towards the success of SAS FORWARD”.

After cutting thousands of jobs due to the pandemic, SAS’ almost 900 pilots are now threatening to go on strike on June 29 over job security and wage issues.