The air group Air France-KLM and the American fund Apollo Global Management signed a definitive agreement for a quasi-equity financing of 500 million euros of the activity of engineering and maintenance components (MRO) of Air France
As mentioned last May, the Franco-Dutch airline group announced on July 14, 2023 the signing of a definitive agreement allowing funds and entities managed by Apollo to carry out financing of 500 million euros “in an operational subsidiary of Air France which will hold a set of components dedicated to Air France engineering and maintenance activities “. Pursuant to this agreement and subject to customary closing conditions, Apollo will enter into perpetual bonds issued by this operating subsidiary, and this financing will be recognized as equity under IFRS, said a press release from Air France-KLM.
The proceeds of the transaction will be “assigned to the general needs of the Group and to the financing of components related to the maintenance activity”. The perpetual bonds will bear interest at 6.9% for the first three years, after which incremental increases and a cap will apply. Air France “will have the option of repaying the bonds at any time beyond the third year”.
This transaction will not result in no change “on the ownership, operational and social aspects of the Engineering and Maintenance activity of Air France. There will be no change in the way Air France uses these components and executes maintenance contracts, and no impact on the contracts of Air France or Air France-KLM employees”.
This transaction is an integral part of the recapitalization measures announced in the 2022 annual results. This new financing is similar to that used by Air France in July 2022 on a fleet of spare engines.
From Concorde to Airbus A350, thank you @Dulles_Airport for this nod to our shared history! https://t.co/wzNRRLQojY
— Air France Newsroom (@AFnewsroom) July 15, 2023