DALLAS — Air France-KLM has repaid €1bn of the state-backed loan (PGE) ahead of schedule thanks to improved operating performance. The loan was issued to offset the negative implications of the COVID-19 pandemic.
The total sum allocated to the company was €4bn. The airline group was able to repay €500m in December 2021, leaving an outstanding sum of €3.5bn.
The group was met with positive results in its financial position for the first half of 2022. The third quarter results reported on October 27, 2022, revealed that the company’s net cash position is approximately €9.8bn along with strong revenues, and adjusted operating free cash flow.
Prêts Garantis par l’État
To achieve this early payment, the European company came to an agreement with the French state and the syndicate of nine banks involved in the PGE (France launched a state-guaranteed loan [prêts garantis par l’État – PGE] scheme to meet urgent cash needs of firms).
The €1bn payment includes €800m and €200m for settlements of the tranche which matures on May 6, 2023, and May 6, 2024, respectively.
With this repayment, the PGE will now stand at €2.5bn and the repayment schedule is as follows: partial redemption of €1.5bn ( leaving €1.35 outstanding ) in May 2024, and final repayment of €1.35bn in May 2025.
The early repayment will decrease financial costs and limit the company’s exposure to floating rates, thereby improving its debt profile.
Featured image: Air France-KLM