Denmark is ready to write off the debt of the loss-making airline SAS and to contribute more capital if private investors do the same, announced the Minister of Finance, Nicolai Wammen.
The airline’s share price jumped 45% as investors welcomed some positive news for the airline, which is struggling to cut costs while also trying to prevent a major strike among its pilots.
“We estimate that we have a percentage of ownership somewhere between 22% -30%,” Wammen said after meeting with members of parliament.
“There is a commitment from a large and wide majority in parliament that we continue to take responsibility and want to contribute to a solution, but now all parties must do the same,” he said.
The deputies had agreed to accept impairments and conversion of bonds, while channeling new funds, provided that private investors will participate, the Ministry of Finance said in a statement.
“If SAS fails to convince the markets that it can have a viable and profitable future, then no money will come from either the market or the Danish government,” said a Conservative member.
Government support also depends on maintaining influence in a number of decisions to ensure that SAS maintains a strong presence at Danish airports for example, which is important both for the Danish economy and for ensuring good travel connections with the rest of the world, Wammen said.
Source: Capital
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