Thursday, July 7

Air France-KLM launches 2.256 bln euro rights issue

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PARIS — Air France-KLM said it was launching a 2.256-billion-euro ($2.41 billion) rights issue to existing shareholders to strengthen its balance sheet and further repay French state aid.

French and Dutch states plan to participate in the capital increase but China Eastern Airlines and Delta Air Lines will sell part of their rights to shipping firm CMA CGM, which will become a shareholder under plans announced last week.

Air France-KLM also confirmed its objective of reducing the ratio of net debt to earnings before interest, tax, depreciation and amortization (EBITDA) to around 2.0-2.5 by 2023.

The rights issue will run from May 27 to June 9 at a price of 1.17 euros per new share or 3 new shares per existing share and will allow the airline group to repay some bonds and strengthen its balance sheet, the Franco-Dutch group said.

($1 = 0.9376 euros) (Reporting by Tim Hepher; Editing by Sudip Kar-Gupta)