Denmark could raise stake in airline SAS to 30%

Denmark is willing to write off debt owed by loss-making airline SAS and to inject more capital along with private investors, Finance Minister Nicolai Wammen said on Friday.

Denmark is willing to write off debt owed by loss-making airline SAS and to inject more capital along with private investors, Finance Minister Nicolai Wammen said on Friday. The airline's share price surged 45% as investors welcomed some positive news for the carrier, which is struggling to cut costs while also seeking to prevent a major strike among its pilots.

"We imagine to have an ownership share somewhere between 22% and up to 30%," Wammen told reporters after meeting with members of parliament. Denmark currently owns 21.8% of SAS. "There is a commitment from a large and broad majority in parliament that we continue to take responsibility and we want to contribute to a solution, but now all other parties must do theirs as well," he said.

Lawmakers had agreed to accept writedowns and the conversion of debt while injecting new equity depending on private investors also taking part, the Finance Ministry said in a statement. SAS is restructuring its business by cutting costs, raising new cash, and converting debt to equity as part of a plan to rescue the carrier from collapse.

The Swedish government, which also has a 21.8% stake in SAS, earlier this week took a much harder stance and said it would not inject more cash. Copenhagen Airport is the airline's largest hub and is strategically and economically important to Denmark.

Adding to the trouble at SAS, some 1,000 pilots in Denmark, Norway and Sweden warned on Thursday they could go on strike from late June over disagreements on wages and ways to cut costs. SAS was not immediately available for comment.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)