Sweden, Norway Put Airline on Privatization Runway
October 13 2016 - 5:20AM
Dow Jones News
STOCKHOLM—Sweden and Norway reduced their stakes in Scandinavian
airline SAS AB, saying the state-controlled carrier would perform
better in private hands.
The Swedish government reduced its stake to 17.1% from 21.3%,
while the Norwegian government lowered its stake to 11.5% from
14.2%. Denmark retains a 14.2% stake in the airline.
"There are no good reasons why the state should own an airline,"
Norwegian Economics Minister Monica Maeland said on Thursday. "The
government has been clear that the company will benefit other
owners than the Norwegian government and the transaction
contributes to this," Ms. Maeland added.
SAS, long majority-owned by the government's of Sweden, Norway
and Denmark, has endured turbulent times in recent years amid
fierce competition from budget airlines—among them Ryanair Holdings
PLC and Norwegian Air Shuttle A/S—providing extra capacity and low
fares for the regional market.
The company swung back to profit last year, helped by cost
reductions and lower fuel prices.
But SAS hasn't taken part in the consolidation of the European
airline sector. That has led to mergers among surviving national
carriers to create Air France-KLM SA, British Airways-parent
International Consolidation Airlines Group PLC and an enlarged
Deutsche Lufthansa AG which owns the national carriers of Austria
and Switzerland.
Swedish Enterprise and Innovation Minister Mikael Damberg said
the reduction in state ownership was a natural step given SAS's
performance would be enhanced by a change of ownership.
"There are good reasons for the Swedish state won't be long-term
owners of a listed airline," Mr. Damberg said. "SAS's long-term
will be strengthened by a new ownership structure that involves a
reduction of state ownership. The sale is the first step in a
gradual and responsible disposal of the Swedish and the Norwegian
state's ownership."
The two governments said a total of 23 million ordinary shares
have been sold to institutional investors, a figure that was
increased from an original plan to sell 19 million shares after
seeing strong investor demand, at a price of 15.50 Swedish kronor
($1.75) a share.
Sweden sold 13.8 million shares, booking the government 213.9
million Swedish kronor ($24.1 million) in proceeds. Norway sold 9.2
million shares for SEK142.6 million. Denmark didn't take part in
the share sale.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 13, 2016 05:05 ET (09:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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