Air France-KLM Group Generates €2.25bn After Oversubscribed Right Issue

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DALLAS – The Air France-KLM Group today reported that it has generated €2.256 billion (US$2.35 billion) in final gross proceeds. This follows a 16% oversubscription to its right issue announced on May 24, 2022.

The Group said it would allocate around €1.7 billion to pay back state aid it received during the pandemic crisis. This, management says, will allow the company to “free itself” from the conditions set by the European Commission. Bosses will use the rest of the money to reduce their net debt.

The Group said the rights issue generated “strong demand” from both current and new investors. Photo: Air France-KLM Group.

New Shareholders

The French and Dutch governments have maintained their respective 28.6% and 9.3% shareholding.

Meanwhile, new investors in the Air France-KLM Group include SkyTeam partners China Eastern Airlines (MU) with 4.7% and Delta Air Lines (DL) with 2.9%. French logistics company CMA CGM has also taken a 9% stake.

The CMA CGM investment also includes a long-term strategic partnership in the air cargo market, with both companies combining their extensive cargo networks. The tie-up automatically allowed the logistics company to develop its air division CMA CGM Air Cargo.

The cargo partnership with CMA CGM will include a fleet of dedicated freighters and also covers Air France-KLM belly aircraft capacity. Photo: Kochan Kleps/Airways.

Company Confidence

Air France-KLM Group CEO Benjamin Smith said, “The success of our capital increase is a strong demonstration of the confidence that our existing shareholders and new investors have in the prospects of Air France-KLM. This operation, which is part of a broader strategy to transform and streamline our Group, will allow us to emerge with a stronger balance sheet and increased strategic flexibility. In a context of strong demand for travel, Air France-KLM will continue to implement its roadmap focused on increased profitability and sustainability, while meeting its customers’ expectations, fulfilling its CSR commitments and seizing the opportunities that will arise as the airline industry recovers.”

Featured Image: Air France A350-900 (F-HYTA). Photo: Casey Groulx /Airways.

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