Air France-KLM has confirmed it has been in discussions with Apollo Global Management (Apollo), the private equity firm, for a second capital injection of €500 million, this time for one of its engineering maintenance units. According to the European carrier, the money will be allocated for general corporate purposes and that no workforce-related changes would be involved.
The new financing arrangement if complete will help strengthen Air France-KLM’s and Air France’s balance sheet, the group said in a press release. Air France-KLM and Apollo Global Management entered into a similar solution in 2022 when the private equity firm invested €500 million in the company to help in repaying French state aid.
Sale-and-leaseback deals are common financing mechanisms in aviation. But a flood of investment from new sources of funding has increased competition for traditional leasing companies. Earlier in April, Air France KLM agreed to revolving credit facilities (RCF) worth €2.2 billion, adding that these are linked to environmental, social and governance (ESG) targets.
Air France–KLM Group, is a Franco-Dutch airline holding company incorporated under French law with its headquarters at Charles de Gaulle Airport in Tremblay-en-France, near Paris. Apollo Global Management, Inc. is an American global private equity firm. Founded in 1990 by Leon Black, Josh Harris, and Marc Rowan, it provides investment management and invests in credit, private equity, and real assets. As of 2022, the company had US$548 billion of assets under management, including US$392 billion invested in credit, including mezzanine capital, hedge funds, non-performing loans, and collateralized loan obligations. (£1.00 = €1.15 at time of publication).
