Air France-KLM is launching a €2.3 billion “rights” issue of 1.9 billion new shares to raise money to repay the state aid it received during the pandemic.
The airline group will use €1.7 billion of this money to repay some of the Covid-19 financial aid received during the height of the crisis. The rest of the funds will be utilised to reduce the company’s debts.
The French and Dutch governments, which are both shareholders in Air France-KLM, have said they will participate in the rights issue and will maintain their current shareholdings after buying their proportion of new shares. The French state currently owns 28.6 per cent of the group and the Netherlands has a 9.3 per cent shareholding.
The financial move will allow Air France-KLM to “free itself from the conditions” set by the European Commission on pandemic bailouts, which prevent it from buying 10 per cent of another company.
Benjamin Smith, CEO of Air France-KLM, said the fundraising would “strengthen our financial autonomy and regain strategic and operational flexibility”.
“As the recovery continues and our economic performance recovers - in particular, thanks to our ambitious transformation plan and the structural benefits it continues to deliver - we want to be in a position to seize any opportunity in a changing aviation sector and to be able to accelerate our environmental commitments,” added Smith.
Other investors including China Eastern Airlines and Delta will also take part in the rights issue. Air France-KLM said it planned to further repay French state aid over the coming quarters.