Thursday, July 7

Air France-KLM in talks with Apollo on 500 mln euro cash injection

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PARIS — Air France-KLM said on Friday it had entered exclusive talks with private equity firm Apollo for a 500 million euro ($529 million) capital injection for one of its engineering and maintenance units to help repay French state aid.

“The proceeds of the transaction would enable Air France-KLM and Air France to partially redeem the French state perpetual bonds,” the airline said, adding that the deal would not cause any operational or workforce-related changes.

The airline’s current market capitalisation stands at 2.73 billion euros.

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An Air France-KLM spokesperson said the deal with Apollo Global Management would not result in the buyout firm taking an equity stake in the airline, saying it was a “purely financial” operation.

Air France-KLM said in February it planned to raise up to 4 billion euros to repay support it received during the pandemic.

The airline said this month it was considering measures such as a capital increase and quasi equity instruments to speed up payments to the French state, its top shareholder.[nL5N2WX115[nL5N2WX115

Shipping firm CMA CGM announced this week it would take a major stake in Air France-KLM.

($1 = 0.9449 euros) (Reporting by Dominique Vidalon; Editing by Tassilo Hummel; Editing by Edmund Blair)