France and Brussels have agreed on the refinancing of Air France-KLM – Minister


FILE PHOTO: The Air France KLM group logo is pictured on the Airbus A350 of Air France’s first airliner during a ceremony at the headquarters of the Airbus aircraft manufacturer in Colomiers near Toulouse, France, on September 27, 2019. REUTERS / Regis Duvignau

PARIS (Reuters) – The French government has reached the broad outlines of an agreement with the European Commission on a state-backed refinancing plan to help strengthen Air France-KLM’s balance sheet, the Minister of Foreign Affairs said on Sunday. Finances Bruno Le Maire.

The Mayor, speaking on LCI TV, declined to comment on the amount in question. He confirmed that the airline group’s board was due to meet on Monday to discuss and approve the package, as successive coronavirus closures take their toll.

Air France-KLM, which received 10.4 billion euros ($ 12.2 billion) in government-guaranteed loans last year, discussed a multi-step recapitalization plan to alleviate debt that as a result, sources said.

This will likely involve converting a French government loan of 3 billion euros into hybrid instruments.

But the plan had been delayed by feuds over EU demands that Air France waive Paris-Orly take-off and landing slots as a condition.

The Mayor said the airline had given up some slots in the negotiations, but not the 24 initially requested by Brussels, which would have put Air France on a par with those ceded by German Lufthansa to Frankfurt and Munich within the framework of its capital increase supported by the State. .

“It has been a long and difficult negotiation, but I think we have struck a good deal with (EU competition chief) Margrethe Vestager,” Le Maire said.

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 slot concessions at Amsterdam-Schiphol.

Reporting by Sarah White and Jean-Stephane Brosse; Editing by Andrew Cawthorne and Alison Williams

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