Scandinavian Airlines (SAS) informed on August 14 that it experienced a debtor-in-possession (DIP) financing credit agreement that worth $ 700 million (USB), or 7.0 billion Swedish Krones respectively.
The funds in discussion are under the management of the financial firm Apollo Global management. DIP financing is a specialized version of bridge financing. Companies that are going through a bankruptcy process or a Chapter 11 process adapts this variant. The cash flow generated from the present and day-to-day operations of the SAS and DIP financing respectively, facilitates the airlines to meet the requirements throughout the Chapter 11 repeatedly.
DIP financing is still looking forward to a green light from the American Bankruptcy Court in the Southern District of New York. However, the DIP capitalisation is laid our as a delayed drawn term loan attached to it. It features a nine month maturity from the closing date. This date can be extended to a little over a year. After going through a competitive and tedious process, Scandinavian Airlines chose Apollo’s DIP capitalisation recommendation. Additionally they consider the terms of DIP financing to b on ‘as-is’ market conditions.
The Chairman of the Board of SAS, Carsten Dilling mentioned that they are pleased to have secured the financing commitment from investment firm Apollo Global Management, which follows an extensive and competitive process.
The Scandinavian Airline is expecting approval for its DIP capitalisation by the court in mid-September of 2022.
