SAS responds KT regarding Braathens

SAS's response to Norwegian Competition Authority regarding acquisition of Braathens: SAS believes documentation proves Braathens is a "failing firm" and without SAS as owners company will not survive On August 20, the Norwegian Competition Authority (KT) presented its preliminary evaluation of SAS's potential acquisition of Braathens. This contained the information that KT rejected the acquisition, basing its findings primarily on the fact that there was insufficient proof that Braathens is a "failing firm." The parties were given until September 3 to respond. Today, SAS submitted its response to the Authority, in which it again states that the background to the agreement between SAS and the majority owners of Braathens for the acquisition of 68.8 percent of the shares in the company, was that Braathens was in such a poor financial situation and the assessment that the involvement of SAS as an owner was the only possibility for the company to survive. It was therefore unexpected that the Authority, in its preliminary findings and apparently also in its investigation, placed so little weight on implementing and documenting a thorough evaluation of Braathens' financial situation. (In the letter of warning, this evaluation is covered by only two of the letter's 32 pages.) SAS disagrees entirely with some of the evaluations made by the Authority in the warning letter. In a separate letter from Braathens to KT, Braathens makes a further report on the company's financial situation. Through the information made available to SAS and the SAS auditors, SAS can impact the evaluation of the company's financial situation shared by Braathens' management, shareholders, Board of Directors and advisers. This states that there are grounds to believe that Braathens will not be able to continue its operations in the Norwegian market other than for a very short period. As far as SAS can foresee, Braathens has documented its need for considerable capital investment, and has also documented that, to date, nobody has been willing to provide this amount. In SAS's opinion, this means that Braathens' legal position can be described as that of a "failing firm", and that the SAS acquisition should therefore be approved. SAS has previously made it clear that because the Competition Authority's decision is not in accordance with Braathens' actual financial situation, SAS will appeal to the Norwegian Government through the Administration Ministry. SAS believes that it would be to the advantage of all parties involved if this matter were to be resolved as soon as possible. On August 20, KT also presented a warning that it would intervene against agreements with major customers, loyalty programs and agreements with travel agencies. SAS will respond to this warning in a separate letter to the Authority. For further information, please contact: Deputy CEO Gunnar Reitan Tel: +46 70 9972844 Head of Domestic Services Johnny Skoglund Tel: + 47 95716380 Information Manager Simen Revold Tel: + 47 95716310 SAS CORPORATE COMMUNICATIONS ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/09/03/20010903BIT00890/bit0001.doc http://www.waymaker.net/bitonline/2001/09/03/20010903BIT00890/bit0001.pdf