Air France-KLM presents its plan to strengthen its cash flow

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The Franco-Dutch airline Air France-KLM has outlined a plan that will help the group to further strengthen its cash flow and restore its negative equity.

Measures to strengthen cash flow have been approved by the group’s board of directors.

As part of these measures, the company plans to carry out a capital increase with a priority subscription period for shareholders. It should improve the group’s own funds up to 1 billion euros.

The Dutch State and Delta Airlines, which respectively hold 14% and 8.8% of the share capital, will not subscribe to this capital increase.

The French State has undertaken to participate in the capital increase while China Eastern Airlines has expressed its interest in participating.

In addition, the French State loan of € 3 billion granted to Air France via the group will be converted into a perpetual hybrid bond instrument. This will improve the group’s equity by € 3 billion.

The French state guaranteed loan of € 4 billion has also been extended with a final maturity in 2023, while the Dutch state guaranteed loan of € 2.4 billion has a maturity date of 2025.

Benjamin Smith, CEO of the Air France-KLM group, said: “These first recapitalization measures are an important step for our group in this exceptionally difficult period.

“They will give Air France-KLM greater stability to move forward when recovery begins, as large-scale vaccination progresses around the world and borders reopen.

“Ensuring Air France-KLM that it maintains a sustainable financial path is essential to achieve our strategic plan, to continue to execute our transformation plans within the group and our airlines.

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