AIR FRANCE-KLM LAUNCHES A €2.26 BILLION CAPITAL INCREASE
by Tim Hepher and Marc Angrand
PARIS (Archyde.com) – Air France-KLM announced on Tuesday the launch of a capital increase of 2.256 billion euros, which should enable it to repay the public aid received during the coronavirus crisis and to initiate the reduction of its debt.
The French and Dutch States, which respectively own 28.6% and 9.3% of the capital of the group, will subscribe to this operation in order to maintain their participation at its current level, specifies the air transport group in a press release.
The maritime transport company CMA CGM will participate to the tune of 400 million euros, as announced last week during the presentation of its alliance with Air France-KLM.
China Eastern Airlines (owner of 9.6% of the capital) and Delta Air Lines (5.8%) will also subscribe but will see their participation diluted because they will only invest the proceeds of the sale of subscription rights sold to CMA CGM .
“The operation we are launching today materializes the work we have been carrying out for several months to consolidate our balance sheet and strengthen our financial autonomy. It will also contribute to allowing the company to regain its strategic margins of maneuver”, declared Benjamin Smith, CEO of Air France-KLM, quoted in a statement.
The capital raised during this capital increase with maintenance of the preferential subscription right (DPS), will be used to reimburse “super subordinated” securities issued in April 2021 and held by the French State in the amount of 1.7 billion euros. euros and strengthen the group’s equity.
In total, Air France-KLM had received 10.4 billion euros in loans guaranteed by the French and Dutch states in 2020 in order to ensure its survival, the coronavirus crisis having caused a collapse in the air transport market.
AF-KLM WANTS TO RELEASE FROM THE CONDITIONS SET BY BRUSSELS
The group, which has recorded more than 10 billion euros in net losses over the past two years, only returned to profit in the third quarter of last year and at the end of March it posted a net debt of 7, 66 billion euros. He explained in February that he planned to raise up to four billion euros to repay state aid.
The crisis has caused the stock market value of Air France-KLM to fall by more than 55% since February 2020, bringing it down to 2.75 billion euros. Tuesday, the action lost 6.19% to 4.08 euros at the start of the session, the largest drop in the Parisian SBF 120 index, then down 1.1%.
The reimbursement of public aid is a priority for its managers because it should allow it to free itself from the conditions imposed by the European Commission on public aid granted during the COVID-19 crisis, which limit its ability to participate in merger-acquisition operations. .
The group cannot in fact acquire more than 10% of the capital of another company until it has repaid 75% of the state aid.
Italy is looking for new shareholders for ITA Airways, the group born from the restructuring of Alitalia, and potential candidates could include a consortium led by the American fund Certares with which Air France-KLM would be associated, we learned on Monday from two sources familiar with the matter.
Air France-KLM declined to comment on ITA on Tuesday.
This reimbursement will continue over the next few quarters, the group assured on Tuesday. At the same time, it confirms its objective of reducing its net debt to around 2.0 to 2.5 times EBITDA (gross operating surplus) by 2023.
The trading period for preferential subscription rights should begin on Wednesday and end on June 7 on the basis of a subscription price of 1.17 euros per share and a subscription parity of three new shares for one held; the subscription period will begin on Friday and run until June 9.
(Report Tim Hepher, French version Marc Angrand, edited by Nicolas Delame and Jean-Michel Bélot)