After the agreement of the European Commission, the French state will once again be able to fly to the aid of Air France, which for a year has been hit hard by the pandemic.
In the first quarter of 2021, the airline expects a loss of operating income of 1.3 billion euros with a debt that exceeds 11 billion euros.
In 2020, In 2020, Air France has already received 7 billion euros (including 3 billion in shareholder advances and 4 billion in loans guaranteed by the State (PGE).
This new support of 4 billion euros provides for the conversion of the state loan of three billion euros already granted by France last year.
To put it simply, this sum will be integrated into the capital of the company.
This plan also provides for a capital increase of up to one billion euros.
In other words, the French State which held a little more than 14% of the capital will rise to almost 30% in the capital.
"The state loan of three billion euros over four years granted to Air France will be transformed into state participation, state equity in the company", confirmed Bruno Le Maire on France Inter .
"It was temporary aid but these three billion will become definitive aid," he said.
Give up slots to competing companies
In return for this new public support aimed at helping it cope with the financial difficulties arising from the COVID-19 pandemic, Air France will have to make 18 slots per day available to competing companies at Paris Orly airport.
In addition, Air France-KLM will not be able to pay dividends or carry out share buybacks until this recapitalization is fully reimbursed, stressed the Commission.
For the capital increase of one billion euros, a priority subscription period for shareholders will be opened after the general meeting of shareholders on May 26.
China Eastern Airlines (already a shareholder) has already announced its intention to participate while maintaining its participation strictly below 10% of the capital.
For its part, the Dutch State, which holds 14% of the share capital, has informed the Group that it will not subscribe to this capital increase.
Ditto for Delta Airlines, which holds 8.8% of the capital.
According to the group, this recapitalization should make it possible to increase "its flexibility in its repayment profile" of its debt.
But more may need to be done.
Air France specified that additional measures aimed at further strengthening the balance sheet are currently being studied.
"Several measures will have to be taken before the annual general meeting of 2022 given that the Group's shareholders' equity will remain negative after this first stage".
Strong commitment from the French state and renewed support from the Dutch state
In addition, Air France announced that the loan guaranteed by the French State ("PGE") of 4 billion euros has been extended with a final maturity date now set at 2023. The loan guaranteed by the Dutch State of 2.4 billion euros has a maturity date of 2025. "These elements make it possible to smooth the debt repayment profile of the group and its airlines," adds the group.
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"Today's announcement demonstrates both the strong commitment of the French state and the renewed support of the Dutch state to help the group overcome this pandemic and this crisis," said Anne-Marie Couderc , Chairman of the Board of Directors of Air France-KLM, this Tuesday.
"These first recapitalization measures are an important step for our group in this exceptionally difficult period," said Air France-KLM Group CEO Benjamin Smith.
“They will give Air France-KLM greater stability to move forward when the recovery begins, as large-scale vaccination progresses around the world and borders reopen.
Ensuring that Air France-KLM maintains a sustainable financial trajectory is essential to achieve our strategic plan, by continuing to execute our transformation plans within the group and our airlines.
"
Over the next few months, and particularly early summer, the group still expects demand to pick up significantly, assuming the positive effects of accelerated vaccination campaigns in several countries could trigger less stringent travel restrictions. of passengers through these countries.
