Life raft to save sinking SAS
The Scandinavian governments will financially help its ailing airline.
RELATED NEWS:
• Sweden looks to dump stake in SAS
The governments of Norway and Denmark have jointly agreed to financially help the struggling airline SAS, according to the news agency Reuters.
The announcement follows the Swedish government's announcement to possible sell its stake in SAS at an "opportune moment". Sweden being the largest shareholder owns 21.4 percent stake in SAS, while Denmark and Norway own 14.3 percent respectively.
The three governments said they would support the $684 million rights issue to shore up a balance sheet ravaged by the recession.
Still, privatization is not seen by the market as imminent.
"The change is coming from the Norwegian government also signaling they would be willing to bring down the stake, but I do think the price reaction to this is the market overreacting," says an analyst to Reuters. "A sale is not happening in the next 12-18 months because you have to see, at least, that they are able to execute their cost cutting".
The governments formed SAS in 1946 to consolidate the Scandinavian markets.
Last Updated (Monday, 22 February 2010 08:51)
