Air-France-KLM is going to issue new shares and wants to raise 2.25 billion euros. With the share issue, the airline wants to strengthen its financial position and also repay the French state aid received.
Air France-KLM will issue 1928 million new shares at a price of EUR 1.17, a substantial discount on the current price of EUR 4.34.
The French state and the Dutch state, both major shareholders of Air France-KLM, are participating and will buy shares in line with their interest. The Netherlands has an interest of 9.3 percent in the airline and 14 percent of the voting rights, France has an interest of 28.6 percent.
On the stock market, the announcement of the new share issue causes a violent price reaction, because investors expect the price to dilute, as it were. The stripe ipo date is found online. The market value of Air France-KLM is currently 2.7 billion euros, and the new issue should raise 2.2 billion. The Air France-KLM share lost 5 percent shortly after opening and fell even further in the morning.
220 million euros
To prevent dilution of that interest and to maintain control, the two governments buy additional shares. In a letter to the House of Representatives, Minister Kaag of Finance and Minister Harbers of Infrastructure write that “based on current expectations, the costs of participation amount to approximately 220 million euros”.
The Senate and House of Representatives must still approve the decision to purchase shares. Kaag and Harbers write that if that decision cannot be taken in the short term, “the cabinet at Air France-KLM will indicate that it will not participate in the share issue, because the prior approval of both Chambers is lacking.”
The airline received support from the Dutch government in 2020 to get through the corona crisis. This support consisted of an amount of 3.4 billion euros in loans and credits guaranteed by the government.
KLM ultimately used just under a billion of that amount. KLM recently announced that it will pay off 311 million euros from the state aid. The remaining EUR 600 million will be repaid in the coming quarters.