SAS unsecured creditor committee weighs in on DIP financing

Chicago, Sept. 6 – SAS AB’s official committee of unsecured creditors weighed in on the debtor-in-possession facility that is the subject of a hearing on Wednesday, according to a statement filed with the U.S. Bankruptcy Court for the Southern District of New York.

Broadly, the committee approves the DIP motion, subject to a number of concessions.

The committee namely would like

• The tag right termination fee lowered to 3% from 4% of commitments;

• Additional terms on the call option added, in that the facility will not be called if the debtors fail to satisfy the conditions precedent to draw amounts in excess of the initial draw and Apollo does not otherwise fund amounts in excess of the initial draw;

• SAS’s decision to reject or accept Apollo’s exercise of the call option or the tag right will be subject to court and committee oversight;

• Any amendments to the call option and/or the tag right will be subject to court approval and committee oversight;

• Before seeking payment for obligations from the proceeds of any avoidance actions, Apollo will first seek to satisfy the obligations from DIP collateral;

• A clarification that multiple call option termination fees cannot be paid;

• Committee professionals will be able to review the calculation of the call option termination fee (if any);

• The “events of default” have been modified to provide the debtors with more flexibility and reduce the odds of a default; and

• The committee will have greater notice rights for any co-investment transactions that Apollo might enter into, including selling DIP facility claims.

A hearing on the $700 million DIP financing is scheduled for Sept. 7.

SAS is Scandinavia’s leading airline, with main hubs in Copenhagen, Oslo and Stockholm. The company filed bankruptcy on July 5 under Chapter 11 case number 22-10925.

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