Nordic governments back SAS for now

Nordic governments back SAS for now
The Norwegian and Danish Governments told the news agency Reuters at the weekend they would financially support the cash-strapped carrier but wanted to eventually privatize it.

This followed on the heels of an announcement by Sweden that it hoped to reduce its ownership in SAS at a suitable point in time. Enterprise Minister Maud Olofsson said a sale was not imminent, but in the long term the government saw no value in owning an airline.

SAS has been hit harder than many other carriers in the global recession because of high operational costs and competition. Industry analysts have long speculated a sale to Lufthansa or Air France KLM.

The three governments said they would support the $684 million rights issue to bolster the red-inked SAS balance sheet. Sweden has a 21.4% stake in SAS, while Denmark and Norway own 14.3% respectively. The remainder is privately held by Wallenberg family interests in Sweden, which has also agreed to subscribe to the rights issue.

The governments formed SAS in 1946 to consolidate the Scandinavian markets.

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