Scandinavian Airlines (SAS) has signed a three-year term loan facility agreement worth $175 million. The Norwegian Export Credit Guarantee Agency (GIEK) has offered a full guarantee to the loan.
The loan is part of an initiative by the Norwegian government to cushion airlines against the coronavirus pandemic’s effects. To date, the airline which has been significantly impacted by the pandemic has worked with four Nordic banks as well as GIEK. The banks have mainly helped clarify the criteria and terms for the guarantees.
The Norwegian parliament approved the guarantees alongside the EFTA Surveillance Authority.
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Loan to increase SAS financial flexibility
The loan will help the SAS’ liquidity for smooth operations in Norway. SAS CFO Magnus Örnberg shares the airline’s plan after the guarantee. Örnberg notes that:
“We are pleased that we have been able to sign this term loan facility with the support of the Norwegian government. The facility increases our financial flexibility during a time with continued uncertainty about when demand will normalize. At the same time, we continue our work to reduce our costs, increase efficiency, and continuously adapt our production to current demand.”
The term loan facility is a coordination of Nordea, Danske Bank, Nordea, SEB, and Swedbank.
Towards the end of November, Norway extended the duration of pandemic-related loan guarantees given to airlines.
The extension gives airlines up to three years to repay loans guaranteed by the government, an increase from two years originally.