The Norwegian and Swedish governments announced the sale on Thursday of a total of 23 million shares in Scandinavian Airlines (SAS), reducing their ownership stakes to a point where SAS no longer can be considered state-owned. Denmark, however, hasn’t cut its stake.
The sales cut Norway’s stake in SAS to 11.5 percent, from 14.2 percent, after the Norwegian government ministry in charge of business and trade sold 9.2 million ordinary SAS shares. Sweden now owns 17.2 percent of SAS, down from 21.3 percent, after selling off 13.8 million shares.
The two governments sold a total of 7 percent of SAS’ shares at a price of SEK 15.50, which resulted in total sale proceeds of NOK 132 million for the Norwegian treasury. Trade Minister Monica Mæland felt the time was right to sell, after years of losses.
“SAS has had positive operating development recently and I have great faith that the company will work in a goal-oriented manner to further improve its competitive position,” Mæland stated in a press release on Thursday. “The (Norwegian) government has been clear that the company will be well-served with owners other than the Norwegian state, and this transaction contributes to that.”
The Norwegian government still holds 37.8 million shares in SAS after Thursday’s transaction, which Mæland thinks was successful. The sale was handled by Citigroup, Nordea and Swedbank, with Pareto Securities and Oslo-based law firm Wiersholm acting as financial and legal adviser respectively. Buyers, according to Mæland’s ministry, included “investors from Norway and abroad.”
‘No hurry’ to sell off more
Mæland said any further sales of Norway’s remaining stake in SAS would be evaluated in accordance with “the company’s situation” and market developments. “We’re not in any hurry and will continue to be a considerable shareholder,” she said. “At the same time, we are also open to evaluating industrial solutions.” She was apparently referring to a takeover of SAS by another airline. Lufthansa of Germany has long been a considered the most likely acquirer.
The sale is in line with the conservative government coalition’s goals “to strengthen private ownership in Norway,” Mæland said, adding that “there are no good reason for the state to own an airline.”
Its investment in SAS hasn’t been the best, given how the airline has struggled over the years to adapt to deregulation and compete with new low-fare airlines that haven’t been saddled with SAS’ powerful labour unions and relatively expensive employees. Newspaper Dagens Næringsliv (DN) reported that SAS share price is down 40 percent so far this year, but the airline has posted better financial results. The Norwegian state has also contributed as much as SEK 2.4 billion in various new stock issues to ward off a permanent grounding.
Denmark opted out
The Danish government did not participate in Thursday’s sale and still owns 14.2 percent of SAS’ shares. SAS maintains a major hub at Copenhagen’s airport, prompting DN to suggest that Denmark’s stake in the airline is thus more politically important than it is in Norway or Sweden.
While the public stake in SAS has thus fallen to 42.9 percent, the three Scandinavian countries may still have control over the airline if they team up with the Swedish Wallenberg family, which holds 7.5 percent of SAS stock. DN wrote that it’s “hardly coincidental” that Thursday’s sale amounted to 7 percent.