Shares of Scandinavian airline SAS plunged 95% at the open on Wednesday, after the airline announced a restructuring deal late Tuesday that would see it delisted from exchanges. Since then, the decline has narrowed, and as of 7:26 a.m. ET, the stock price was last down about 83%.
Before the share price plunged, the airline said on Tuesday that US investment company Castlelake and fellow aviation company Air France-KLM will become SAS's new major shareholders, holding about 32% and 20% of the company's shares respectively. The Danish government is expected to hold about 26% of SAS, while Danish investment firm LindInvest will hold 8.6%, according to SAS.
"All of SASAB's common shares and listed commercial hybrid bonds are expected to be canceled, redeemed and delisted," SAS said in a statement on Tuesday.
Prior to this, SAS had experienced years of financial difficulties. The airline filed for bankruptcy protection in the United States in July 2022 as pressure mounted from a pilot strike and sluggish demand following the COVID-19 pandemic.
SAS also said it would eventually break away from airline group Star Alliance, one of its founding members, to become a member of SkyTeam Alliance, which is linked to Air France-KLM.
Jacob Pedersen, head of equity research at Sydbank, told CNBC's "Squawk Box Europe" on Wednesday that the move could affect the airline industry, especially the dynamic relationship between SkyTeam and Star Alliance.
"This will shift strength towards the Sky team, particularly in the Nordic region, and some Star Alliance airlines may have to rethink their presence, or at least change strategies, as they will now lose SAS as an alliance partner in this area," he said.