A source said U.S. asset manager Apollo Global Management Inc (APO.N) would apply to Swedish and Danish regulators to purchase a majority interest in SAS AB (SAS.ST) as part of the Scandinavian airline’s rescue plan.
The U.S. asset manager’s interest boosted the struggling carrier’s shares by 14% on Wednesday morning. 5.9% up at 1011 GMT.
Since filing for Chapter 11 bankruptcy last July to cut costs and debt after pilot wage talks failed, SAS has lost almost 60% of its value.
A transaction with the U.S. private equity behemoth, which has invested in U.S. and Mexican airlines, would challenge European Union laws prohibiting more than 50% of an airline owned outside the bloc of 27 nations.
The source, who requested anonymity since the topic is classified, said Apollo hopes to win clearance for a sale because most of its funding comes from European investors.
Two sources say no investment decision has been made yet. The initial source predicted a deal by year-end.
Apollo and SAS declined to comment.
The first source stated Apollo would mostly engage with Swedish and Danish aviation officials to get the certification.
The European Commission would be engaged, but national authorities would approve ownership changes.
In its Chapter 11 bankruptcy plan, the airline seeks large investors and equity.
Apollo provided a $700 million debtor-in-possession (DIP) loan to support the procedure. Converting that loan to shares at the end might make the U.S. corporation a large SAS stakeholder.
Like ITA Airways and TAP, the airline has struggled to compete in Europe’s fragmented aviation economy.
Sweden and Denmark, holding 22% of SAS, would favor a merger. Private stockholders own the rest.
Denmark’s finance ministry told Reuters it was seeking a majority SAS shareholder. It added any rescue would require the airline to keep Copenhagen a major passenger hub.
Sweden will not fund SAS.
According to sources, SAS will keep its Scandinavian identity under a new owner.
Apollo entered the airline sector before.
In 2018, it invested in Sun Country Airlines (SNCY.O) to assist it in recovering around and going public in 2021.
After Chapter 11 bankruptcy, the business became Aeromexico’s major stakeholder in 2020. The two sources claimed its long-term investing experiences demonstrate flexibility.
