Air France-KLM has launched a new private placement capital increase for approximately €988 million, which may be increased to a maximum amount of €1.136bn in the event of the exercise in full of the increase option. The subscription price per new share is between €4.84 and €5.31.
The net proceeds will be allocated to strengthen the equity of Air France. Air France will use the allocated amount to consolidate its liquidity and finance general corporate purposes in the context of the Covid-19 crisis.
The capital Increase will lead to the issuance of 186 million new shares, which may be increased to 214 new shares if the full option is exercised.
In the context of the recapitalization plan, Air France-KLM will also proceed with the issue of undated deeply subordinated notes for a total amount of €3 billion, subscribed in full by the French State by way of set-off on claims it holds on the Company pursuant to the shareholders’ loan granted in May 2020, fully drawn for the amount of €3 billion (the “Super-Subordinated Notes”).
This issue will be composed of three tranches with a perpetual maturity and a nominal amount of €1 billion each, with respective redemption options (non call) at 4, 5 and 6 years, and bearing interest at 7.00%, 7.25% and 7.50% respectively until these dates. Interest on the Super-Subordinated Notes will be capitalized.
These initial interest rates of each tranche of the super-subordinated notes will be revised on the first early redemption date at the option of the Company of the relevant tranche and every 5 years thereafter, on the basis of the 5-year Euribor mid-swap rate increased by the initial margin retained for the initial fixed interest rate and the applicable Step-Up margin.
The French State, which holds 428,634,035 shares (i.e. 14.3% of the share capital), committed on 12 April 2021 to subscribe up to a maximum of 65.9% of the capital increase (excluding the Increase Option) corresponding to a maximum amount of €650.8 million but it will not hold more than 29.9% of the Company's share capital.
China Eastern Airlines, which holds 37,527,410 shares of the Company (i.e. 8.8% of the share capital and 10.5% of the voting rights), committed on 2nd April 2021 to subscribe on an irreducible basis by subscribing 23,944,689 New Shares, for a maximum amount of approximately €127.1 million and on a reducible basis by subscribing 7,652,559 New Shares for a maximum amount of €40.6 million, in order to hold less than 10% of the share capital.
The Subscription Commitments total approximately €777.9 million and represent approximately 78.7% of the amount of the Capital Increase.
The Dutch State, which holds 60,000,000 shares of the Company (i.e. 14.0% of the share capital) and Delta Air Lines, which holds 37,527,410 shares of the Company (i.e. 8.8% of the share capital), will not participate.
Crédit Agricole Corporate and Investment Bank, Deutsche Bank, HSBC and Natixis are acting as joint global coordinators, joint lead managers and joint bookrunners. Banco Santander and Société Générale are acting as joint lead managers and joint bookrunners.