SAS — Capital/Financing Update 2023

Jan 13, 2023

SAS Reaches Agreements with Two Additional Lessors - Concludes Lessor Negotiations as Part of Its Chapter 11 Process

SAS Reaches Agreements with Two Additional Lessors - Concludes Lessor Negotiations as Part of Its Chapter 11 Process

SAS AB ("SAS" or the "Company") announces that it has reached agreements with

two additional lessors, representing 13 aircraft in the aggregate, to amend the

terms of existing aircraft and equipment lease agreements. With these

agreements, SAS concludes its lessor negotiations as part of the chapter 11

process. In total, SAS has reached agreements with 15 lessors, representing 59

aircraft. Through the amended lease agreements, SAS expects to achieve the

targeted annual cost savings of at least SEK 1.0 billion in reduced aircraft

lease expenses and annual cash flow items relating to aircraft financing. This

constitutes an important step in achieving the SEK 7.5 billion in annual cost

savings by fiscal year 2026 under the SAS FORWARD plan. The new amended lease

agreements are subject to approval by the U.S. Bankruptcy Court for the Southern

District of New York (the "Court") and to the plan of reorganization in the

chapter 11 process being confirmed and becoming effective.

As part of SAS' comprehensive business transformation plan, SAS FORWARD, SAS set

a target for annual cost reductions of SEK 7.5 billion by fiscal year 2026, as

compared to the annual cost base for fiscal year 2019. An important part of the

targeted cost reductions, at least SEK 1.0 billion, are expected to be achieved

in reduced aircraft lease expenses and annual cash flow items relating to

aircraft financing.

Today, SAS announces that SAS has entered into agreements with two additional

lessors - Air Lease Corporation and Jackson Square Aviation - representing 13

aircraft in the aggregate, including one wide body and twelve narrow body

aircraft, as well as certain equipment related thereto. With these agreements,

SAS concludes its lessor negotiations as part of its chapter 11 process, having

reached agreements with 15 lessors in total, representing 59 aircraft in the

aggregate, including seven wide bodies and 52 narrow bodies. Through the amended

lease agreements, SAS expects to achieve the targeted annual cost savings of at

least SEK 1.0 billion in reduced aircraft lease expenses and annual cash flow

items relating to aircraft financing, as part of the SAS FORWARD plan.

Anko van der Werff, President and Chief Executive Officer of SAS, says:

"We are pleased to announce that we have reached an important step in our

chapter 11 process, having concluded negotiations with aircraft lessors. Through

these agreements, we expect to achieve our targeted cost reductions related to

annual aircraft lease and financing costs, which constitutes important progress

in reaching our overall targets in the SAS FORWARD plan. We are grateful to our

lessors for working constructively with us. We continue making progress in our

transformation journey and in becoming a more competitive airline."

As of the date of this announcement, SAS expects its fleet to soon consist of

134 aircraft, of which 35 are contracted through third parties, 22 are owned by

SAS and 77 are subject to various financing arrangements. The reconfigured fleet

includes 59 aircraft that have been subject to restructuring and 18 aircraft

with lease agreement terms that have been determined to be at or better than

market levels.

Update on Chapter 11 Process - Second Tranche of SAS' DIP Financing

SAS is making steady progress in its chapter 11 process and continues to work

towards completing the process during the second half of 2023. As stated in SAS'

year-end report for fiscal year 2022, the second tranche of SAS' debtor-in

-possession ("DIP") financing, amounting to USD 350 million, was expected to be

available for utilization in the first quarter of fiscal year 2023 (November

2022-January 2023). SAS continues to work towards meeting certain conditions

under the DIP term loan agreement to access the second tranche of the DIP

financing as soon as possible during the second quarter of fiscal year 2023

(February-April 2023). SAS continues to have sufficient liquidity to maintain

its operations pending the utilization of the second tranche of the DIP

financing. SAS will revert with information on the timing of the utilization and

the next steps in the chapter 11 process in due course.

Additional Information About the Chapter 11 Process and Implementation of SAS

FORWARD

On July 5, 2022, to accelerate the implementation of its comprehensive business

transformation plan SAS FORWARD, SAS announced that it had voluntarily filed for

chapter 11 in the U.S., a well-established and flexible legal framework for

restructuring businesses with operations in multiple jurisdictions. Through this

process, SAS aims to reach agreements with key stakeholders, restructure the

Company's debt obligations, reconfigure its aircraft fleet, and emerge with a

significant capital injection. The SAS FORWARD plan encompasses raising at least

SEK 9.5 billion in new equity capital as well as reducing or converting SEK 20

billion of debt into common equity (of which a majority is on-balance sheet

debt), including state hybrid notes, commercial hybrid notes, Swiss bonds, term

loans from states, aircraft lease liabilities and maintenance contract

obligations and other executory contract obligations. SAS targets to complete

its court-supervised process in the U.S. during the second half of 2023, the

implementation of which is likely to entail additional legal proceedings in

other jurisdictions than the U.S. As a result, there is no assurance that there

will be any recovery for the shareholders of SAS AB.

Additional information about the Company's voluntary chapter 11 process is

available on the Company's dedicated restructuring

website,https://sasgroup.net/transformation. Court filings and other documents

related to the chapter 11 process in the U.S. are available on a separate

website administered by SAS' claims agent, Kroll Restructuring Administration

LLC, athttps://cases.ra.kroll.com/SAS. Information is also available by calling

(844) 242-7491 (U.S./Canada) or +1 (347) 338-6450 (International), as well as by

email at SASInfo@ra.kroll.com.

Advisors

Weil, Gotshal & Manges LLP is serving as global legal counsel, Norton Rose

Fulbright is serving as special aircraft finance counsel, and Mannheimer

Swartling Advokatbyrå AB is serving as Swedish legal counsel to SAS. Seabury

Securities LLC and Skandinaviska Enskilda Banken AB are serving as investment

bankers, Seabury is also serving as restructuring advisor. FTI Consulting is

serving as financial advisor.

For further information, please contact:

SAS Press office, +46 8 797 29 44

Louise Bergström, VP Investor Relations, +46 70 997 0493

SAS, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and

Stockholm, is flying to destinations in Europe, USA and Asia. Spurred by a

Scandinavian heritage and sustainable values, SAS aims to be the global leader

in sustainable aviation. We will reduce total carbon emissions by 25 percent by

2025, by using more sustainable aviation fuel and our modern fleet with fuel

-efficient aircraft. In addition to flight operations, SAS offers ground

handling services, technical maintenance and air cargo services. SAS is a

founder member of the Star AllianceT, and together with its partner airlines

offers a wide network worldwide. Learn more at https://www.sasgroup.net

ADDITIONAL INFORMATION

The press release does not constitute an offer to sell or issue, or the

solicitation of an offer to buy or acquire, or subscribe for, shares or any

other financial instruments in SAS.

This press release contains forward-looking statements that reflect SAS' current

view of future events as well as financial and operational development. These

statements may include, without limitation, any statements preceded by, followed

by or including words such as "intend", "assess", "expect", "may", "plan",

"estimate" and other expressions involving indications or predictions regarding

future development or trends and other words and terms of similar meaning or the

negative thereof. These forward-looking statements have been prepared for

illustrative purposes only, are not based on historical facts, are not

guarantees of future performance, reflect SAS' beliefs and expectations, and are

subject to known and unknown risks, uncertainties and assumptions and other

factors that could cause actual events and performance to differ materially from

any expected future events or performance expressed or implied by such forward

-looking statements. As a result of these risks, uncertainties, assumptions and

other factors, you should not place undue reliance on these forward-looking

statements as a prediction of actual future events or otherwise. The information

contained in this press release is subject to change without notice and, except

as required by applicable law, SAS does not assume any responsibility or

obligation to update publicly or review any of the forward-looking statements

contained in it, whether as a result of new information, future events or

otherwise. Nothing in this press release constitutes or should be construed as

constituting a profit forecast.