Air France KLM redeems 500 million euros worth of debts and may raise new equity

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FILE PHOTO: Logo of Air France KLM Group is pictured on the first Air France airliner's Airbus A350 during a ceremony at the aircraft builder's headquarters of Airbus in Colomiers

PARIS -Air France KLM has redeemed 500 million euros ($564.8 million) from an earlier French state loan issued to help the airline cope with the fallout from the COVID-19 pandemic, and the company said on Monday it could also raise new equity.

Air France-KLM said it had redeemed 500 million euros out of a 4 billion euro bank loan guaranteed by France, and had negotiated to extend the maturity on the overall loan from May 6, 2023 to May 6, 2025.

The airline, which like many in its sector has been hit by travel restrictions imposed to curb the spread of the COVID virus, said it was in talks on strengthening its capital.

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“As previously disclosed, discussions are ongoing on further capital strengthening measures at Air France-KLM Group level. These measures could include instruments such as the issuance of equity or quasi-equity instruments, depending on market conditions,” Air France KLM said.

Two sources familiar with Air France KLM’s plans had told Reuters earlier this month that Air France KLM was considering delaying a planned capital increase because of tough travel restrictions imposed by governments to mitigate the spread of the Omicron variant of the coronavirus.

($1 = 0.8853 euros)

(Reporting by Sudip Kar-Gupta; Editing by Shri Navaratnam nd Stephen Coates)