MAIMI – Pursuing the announcement made by the French Finance Minister, Bruno Lemaire, the financing of Air France (AF) is taking shape under the form of a share issuance valued at US$5.71 (€ 4.84) each, for a total amount of US$1.18bn (€1bn), 8.85% less than Monday’s market closure value.
The financing, which is meant to bail out AF from the actual financial difficulties, counts on the emission of 186.086.956 new shares, destined to private placement, and raise the expected capital when the extensions clauses are exercised. The State shall participate with a maximum amount of US$ 768 (EU€ 650.8ml).
China Eastern Participates, Delta Air Lines and Dutch Government Decline
China Eastern Airlines (MU), which holds already holds 8.8% of AF since 2017, is ready to participate within the limits of 10% of the total capital. Delta Airlines (DL), also an AF share holder, will not participate to capital raise, the same decision being taken by the Dutch Government, already in possession of 14% of AF shares
With a separate announcement, AF has stated that, with regard to the MU’s participation in securing the financing, the two Airlines will extend their partnership with an intensified commercial cooperation and in an increase of non-commercial activities such as ground services, catering, or maintenance.
It also stated that an increase in presence on the Beijing (PEK) market with the services from Paris-Charles de Gaulle Airport (CDG) and Amsterdam (AMS) joining the AF-KLM joint venture with MU “when the times would so permit.”
To obtain EU clearance for re-financing, AF had to relinquish 18 daily slots out of ORY and CDG, with a loss of 6570 movements per year, a more clement measure considered the initial EU request of 8700 yearly movements handover.
Featured image: Air France F-GSPO Boeing 777-200 – Photo : Tony Bordelais/Airways