Norway could allow airline SAS to convert debt to equity

By Gwladys Fouche

OSLO (Reuters) – Norway will support a plan by airline SAS to convert debt into equity under certain conditions but does not plan to remain a long-term stakeholder, Industry Minister Jan Christian Vestre said on Tuesday.

SAS owes the state about 1.5 billion Norwegian crowns ($153 million) from loans made during the COVID-19 pandemic, he said, adding that these can be converted into equity under certain conditions.

Vestre did not elaborate on the conditions that must be met, saying this was market-sensitive information.

The airline said it “appreciated” the support from the Norwegian government, describing it as an “important step” towards the plan’s success.

SAS this year set out a plan to cut costs, convert debt and attract fresh cash from equity investors and said that restructuring was needed to prevent the carrier from running out of money.

Vestre reiterated that Norway, which sold out of SAS as a shareholder in 2018, will not take part as an investor in any SAS share issue, a position similar to that of the Swedish government.

Denmark, however, has said that it could raise its stake in SAS.

Labour Party politician Vestre also urged SAS management to resolve its conflict with unions over pay and conditions.

“They would have better pre-requesites to succeed with a challenging restructuring if there is ‘peace at home’, so I hope they do (resolve the conflict),” he told Reuters.

He declined to say whether a deal with the unions is among the conditions for Norway to accept the SAS debt conversion.

($1 = 9.7864 Norwegian crowns)

(Reporting by Gwladys Fouche; Editing by Stine Jacobsen and David Goodman)