Airline SAS AB received approval from a bankruptcy court in New York for a $1.2 billion rescue package that will see Air France-KLM and private equity firm Castlelake LP become owners in the Scandinavian flag-carrier, Bloomberg News reported. The company filed for chapter 11 bankruptcy protection in July 2022, saying it faced a significant decline in passenger demand during the COVID-19 pandemic as well as a series of pilot strikes and intense competition from low cost air carriers. The agreement will further consolidate Europe’s aviation industry with Air France-KLM having the option to take a controlling interest after two years under certain conditions. The new shareholder group, which also includes the Danish state and Lind Invest ApS, can now provide the ailing airline with $475 million in new equity and $725 million in secured convertible debt. Castlelake is also lending money to SAS to refinance the $500 million outstanding on a chapter 11 loan provided by Apollo Global Management Inc., which lost out to the Air France-KLM consortium, according to a statement late on Tuesday.
