Air France-KLM has repaid 75% of the recapitalization aid from the French state

Air France KLM announced yesterday that it had repaid 75% of the recapitalization aid granted by theFrench state during the Covid-19 pandemic, which relieves the Franco-Dutch aviation group of various restrictions imposed by the European Commission.

The Franco-Dutch group received 3.6 billion euros in recapitalization support from the French state, of which 3 billion euros in direct loans converted into perpetual hybrid bonds, and 600 million euros in shares issued following a capital increase.

The direct loan waswith multiple restrictions“Recalls Air France-KLM, which had to comply in particular with prohibitions imposed by the European Commission in the context of state aid, such as the impossibility of taking over more than 10% of the capital of a competing company. In 2022, the group already had “of that 3 billion euros, 2.4 billion euros have been repaid, bringing the remaining amount to 600 million euros“. As announced during the presentation of the 2022 annual results, the group intends to completely waive the recapitalization support and the associated restrictions as of April 19, 2023.

In addition, the Group will refinance EUR 320 million by issuing new perpetual hybrid bonds with the French State that qualify as compensatory aid to Air France. These new unrestricted perpetual bonds have similar financial terms to the redeemed bonds, with a blackout date and a deferred rate hike for an additional two years (i.e., March 2029).

Air France-KLM has already announced on Wednesday that it has finished repaying the French State-guaranteed loan (PGE) provided to Air France to help it through the Covid-19 crisis, namely 2.5 billion euros . The Franco-Dutch aviation group returned to profit in 2022 after two years of losses due to the health crisis.

©Air France-KLM

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