Air France-KLM to consider refinancing board meeting, sources say | WKZO | All Kalamazoo

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PARIS (Reuters) – Air France-KLM’s board of directors is expected to meet on Monday to discuss a state-backed refinancing plan intended to strengthen its balance sheet after a year of coronavirus shutdown, said Friday two sources close to the case.

The airline group, which received 10.4 billion euros ($ 12.2 billion) in government-guaranteed loans last year, discussed a multi-step recapitalization plan to alleviate the resulting debt. results, sources said.

But the plan, likely to include converting a € 3 billion loan from the French government into hybrid instruments, has been delayed by wrangling over European Union demands that Air France give up take-off slots. and landing of Paris-Orly as a condition.

French Finance Minister Bruno Le Maire announced a breakthrough in those talks earlier this week, predicting a deal in “a few days”.

Air France-KLM declined to comment on the scheduled meeting of the airline group’s board of directors, first reported by Bloomberg.

EU officials initially requested a number of slots similar to the 24 ceded by Germany’s Lufthansa to Frankfurt and Munich in exchange for its government-backed capital hike, sources familiar with the talks said.

This position sparked protests from Air France, its unions and the government.

France and the Netherlands each own nearly 14% of Air France-KLM, and the Dutch state has had separate discussions with the EU over converting its € 1 billion loan to KLM into debt. hybrid in exchange for niche concessions at Amsterdam-Schiphol.

The conversion of public debt will not be enough to straighten Air France-KLM’s balance sheet, analysts believe, who predict a new dilutive capital increase will follow.

The group told investors it plans to raise “quasi-equity and equity,” after its balance sheet recorded € 5.42 billion in negative equity as of December 31.

(Reporting by Laurence Frost; Additional reporting by Gwenaelle Barzic; Editing by Edmund Blair and Barbara Lewis)

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