SAS’s €833 million recapitalization gets EU nod at second try

SAS AB’s €833 million ($915 million) Danish and Swedish recapitalization was approved by European Union state-aid watchdogs, in a revised decision after an earlier approval was struck down by an EU court.

The European Commission said Wednesday that the support package complies with its rules on state support under the bloc’s emergency framework to help firms that suffered during the pandemic. 

It added that the a mechanism proposed by SAS to increase the remuneration of Denmark and Sweden and incentivize their exit from the aid addresses concerns raised by the EU’s General Court. 

Judges had taken a hard line of other EU state aid packages in the airlines industry — including striking down the EU’s approval of a €6 billion aid deal for the German flag carrier Deutsche Lufthansa AG. 

SAS operates across Denmark, Sweden and Norway. In 2020, it was at risk of default and insolvency due to the coronavirus pandemic and the travel restrictions in place to limit the spread of the virus, prompting Danish and Swedish government to offer the airline support.  

SAS said in a statement that it’ll hold an extraordinary general meeting in January to seek approval for the so-called “step-up mechanism” the EU said is required for the countries’ share investments.