SAS — Share Issue/Capital Change 2020

Jun 15, 2020

POLITICAL SUPPORT FROM THE GOVERNMENTS OF DENMARK AND SWEDEN FOR A RECAPITALIZATION OF SAS

POLITICAL SUPPORT FROM THE GOVERNMENTS OF DENMARK AND SWEDEN FOR A RECAPITALIZATION OF SAS

Today, the Swedish Government has put forward a proposal to the Swedish

Parliament to support SAS AB (publ) ("SAS") with up to SEK 5 billion as part of

the company's necessary Recapitalization Plan due to the negative effects of

COVID-19. In addition, the Danish government has today communicated political

unity for a recapitalization of SAS. The company estimates that the

recapitalization will encompass new funding need of some SEK 12.5 billion and

additional measures. The aim of the recapitalization plan is to ensure that SAS

is fully funded and that shareholders equity will be at levels experienced

before COVID-19 pandemic when business volumes return to pre-corona levels. SAS

remains in dialogue with selected stakeholders regarding the terms and

conditions of the recapitalization plan and the burden sharing measures required

by the Swedish and Danish governments. These measures will involve internal,

external and financial stakeholders in the company, including the holders of SAS

outstanding bonds and hybrid notes. Further details are intended to be announced

before end of June.

As an effect of COVID-19, there has been a sharp drop in number of passengers

and consequently revenues for SAS. Despite countries starting to re-open their

borders, the recovery phase for the airline industry and SAS will most likely go

well into 2022 before reaching levels like the demand ahead of the COVID-19

outbreak.

Given the negative financial impacts of the pandemic, the Board of Directors of

SAS have approved a revised business plan, including a reduction of workforce by

5 000 and the need for productivity improvements in the range of 15-25% in all

collective bargaining agreements. The plan also includes continued strict cost

control procedures, renegotiated contracts with suppliers, reduced spend on

marketing, product, IT development and other projects. Furthermore, it will

entail an adaptation of the fleet size through postponements in aircraft

deliveries.

Despite these measures, the revised business plan will require a

recapitalization of the company for it to be able to continue its operations and

its sustainability agenda.  The Swedish and Danish Governments share the view of

the Board of Directors of SAS on the need for a recapitalization. In this light,

SAS welcomes the fact that the Swedish Government has put forward a proposal to

the Swedish Parliament to support the company with an amount up to SEK 5 billion

in shares and/or other transferable securities, as well as the Danish political

agreement for the recapitalization of SAS.

Because of COVID-19 and the expected recovery of the traffic to, from and within

Scandinavia, SAS estimates that the company will need some SEK 12.5 billion of

new funding as part of the recapitalization plan.  The aim of the plan is to

ensure that SAS is fully funded and that shareholders equity will be at levels

reported before the COVID-19 pandemic when anticipated business volumes return

to pre-corona levels in 2022. As part of the potential plan, the Swedish and

Danish governments have required burden sharing measures involving internal,

external and financial stakeholders in the company, including holders of SAS

outstanding bonds and hybrid notes.  SAS remains in dialogue with the

governments and other selected stakeholders to agree on the terms and conditions

of their participation. SAS also continues its efforts to secure support from

the Norwegian government. The ambition is to announce further details before the

end of June.

For further information. please contact:

SAS press office. +46 8 797 2944

Michel Fischier. VP Investor Relations. +46 70 997 0673

SAS, Scandinavia's leading airline, carries 30 million passengers annually to,

from and within Scandinavia. The airline connects three main hubs - Copenhagen,

Oslo and Stockholm - with over 125 destinations in Europe, the US and Asia.

Spurred by a Scandinavian heritage and sustainable values, SAS aims to reduce

total carbon emissions by 25% and operate with biofuel equivalent to equal the

total consumption of fuel used to operate all domestic SAS flights, by 2030. In

addition to airline operations, SAS offers ground handling services. technical

maintenance and air cargo services. SAS is a founding member of Star AllianceT

and together with partner airlines offers almost 19.000 daily flights to more

than 1.300 destinations around the world.

Learn more at https://www.sasgroup.net

This is information that SAS AB is obliged to make public pursuant to the EU

Market Abuse Regulation. The information was submitted for publication by Michel

Fischier at 08:50 a.m. CEST on 15 June 2020.