The Covid-19 crisis has been devastating for the Air France-KLM airline group as for other companies around the world. With this announcement of the launch of a new capital increase of 2.26 billion euros, the group hopes this time to get back in working order by reimbursing the aid received during the crisis and reducing its debt.
Thanks to this operation, Air France will be able to devote 1.7 billion to loan repayments. “The very significant financial liquidity available to the company (10.8 billion euros at March 31) in a better oriented operational context should allow the continuation of the reimbursement of State aid in the coming quarters. Reimbursing this aid will greatly contribute to improving the company’s financing cost,” the company specifies. In addition, Air France-KLM confirms its debt ratio target to reach around 2 times to 2.5 times by 2023.
“We want to be able to seize any opportunity”
The French and Dutch States wish to take part in this operation and keep the same level of capital, while the two other main shareholders, the Chinese companies China Eastern and the American company Delta Air Lines, will see their participation reduced in favor of a new entrant, the French shipowner CMA CGM which will invest up to 400 million euros, the company added in a press release.
“The operation that we are launching today gives concrete expression to the work that we have been carrying out for several months to consolidate our balance sheet and strengthen our financial autonomy. It will also contribute to enabling the Company to regain its strategic leeway, explained Ben Smith, the Managing Director. And to add: “As the recovery is confirmed and our economic performance recovers, notably under the effect of the ambitious transformation plan whose structural benefits are already visible and will continue, we want to be able to to seize any opportunity in a changing aviation sector and to be able to accelerate our environmental commitments”.
In total, 1,924 million new shares will be placed on the market between May 25 and June 7 at a price of 1.17 euro per new share.