With demand for travel showing signs of a recovery and improved access to capital markets, Air France-KLM will repay €500 million of a €4 billion loan from a consortium of nine French State banks. The original loan was provided to the carrier to help it negotiate the knock-on effects of the global pandemic. In addition to the partial repayment of the loan, Air France-KLM is looking to renegotiate the date for final settlement of the loan from May 6, 2023, to May 6, 2025.
The carrier will repay €800 million in May 2023, €1.35 billion in May 2024, and a final payment of €1.35 billion will be made in May 2025. This partial redemption combined with the now amortized redemption profile of the PGE is a new milestone on the restructuring path of the debt profile and of the balance sheet of the Group Air France-KLM, following the €1 billion capital increase and the conversion of a 3 billion euros French State loan into three perpetual bonds in April 2021, the issuances of €800 million dual tranches senior bonds in July 2021 as well as the EMTN (Euro Medium Term Notes) programme in September and the solicited ESG rating obtained from Standard and Poor’s in October.
Air France-KLM is also looking to strengthen its capital. “As previously disclosed, discussions are ongoing on further capital strengthening measures at Air France-KLM Group level. These measures could include instruments such as the issuance of equity or quasi-equity instruments, depending on market conditions,” Air France KLM said. (£1.00 = €1.17 at time of publication).