Air France-KLM and Air France announce today the full exit of the French Recapitalization State Aid under the EU Covid-19 Temporary Framework

Rhea-AI Summary

Air France-KLM has successfully exited the French Recapitalization State Aid under the EU Covid-19 Temporary Framework. The airline repaid €300 million in hybrid perpetual bonds and compensated the French State for shares subscribed in 2021, totaling €407 million. This exit eliminates previous restrictions tied to the aid. The Group refinanced its obligations via a new issuance of hybrid perpetual bonds with similar terms and no restrictions, assimilated into the previously issued €320 million bonds. CEO Benjamin Smith heralded this development as a crucial milestone, highlighting the airline's ongoing transformation and commitment to sustainability.

Positive

• Successful repayment of €300 million in hybrid perpetual bonds.
• Elimination of aid-related restrictions, allowing greater operational flexibility.
• Refinanced €407 million through issuance of new hybrid perpetual bonds with no restrictions.

Negative

• None.

Paris, 19 April 2023

Air France-KLM and Air France announce today the full exit of the French Recapitalization State Aid under the EU Covid-19 Temporary Framework

• Air France-KLM has fully repaid, the €300 million remaining French State hybrid perpetual bonds and paid the required compensation of the French State for the shares subscribed in April 2021 without change required of the capital ownership
• The Group has therefore refinanced €407 million with a new issuance of hybrid perpetual bonds with the French State, without any restrictions attached.

Following the intention expressed during the presentation of the Group’s Full Year 2022 results on February 17, 2023, Air France-KLM today announces the final repayment of the outstanding perpetual hybrid bonds held by the French State, as well as the required compensation of the French State for the shares subscribed in April 2021 as per the EU Covid-19 Temporary Framework. This transaction allows the Group to fully exit the Covid-19 recapitalization State aid as well as its related restrictions and without any change of the capital ownership.

The Group has now refinanced these repayment and compensation, for a total of €407 million through the issuance of new French State hybrid perpetual bonds, in compliance with the European Commission decision on February 16, 2023¹. These new hybrid perpetual bonds with no restriction attached contain similar financial conditions as the one repaid and will be assimilated to the €320 million hybrid perpetual bonds issued on 17 March 2023, with non-call date and interest rate step-up postponed by an additional two years (March 2029).

Mr. Benjamin Smith, Group CEO, stated: “Today marks an important milestone for Air France-KLM. I am pleased that we have now fully repaid all State aid, which releases us from the associated conditions. I want to thank the French and Dutch States again for their

invaluable support during this unprecedented Covid-19 crisis, and I also wish to express my gratitude to our staff around the world for their unwavering commitment in these difficult times. I am confident that we will be able to continue the successful turnaround we have begun

thanks to our continued and accelerated transformation, and that we will emerge stronger out of this trying period, as a leader with a strong sustainability focus”.

Investor Relations                                                        

Michiel Klinkers                             Marouane Mami                                                            

michiel.klinkers@airfranceklm.com        mamami@airfranceklm.com

Website: www.airfranceklm.com

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1 As a reminder, this decision approved a compensation aid of up to €1,4 billion to Air France making good the Covid-19 damage between 17 March and 30 June 2020

Attachment

• State_aid_exit_AFKL_and_AF

FAQ

What significant financial milestone did Air France-KLM achieve on April 19, 2023?

Air France-KLM fully exited the French Recapitalization State Aid by repaying €300 million in hybrid perpetual bonds.

How much total compensation did Air France-KLM pay to the French State?

Air France-KLM paid a total of €407 million to the French State as part of their state aid exit.

What does the refinancing of €407 million involve for Air France-KLM?

The refinancing involved issuing new hybrid perpetual bonds that carry no restrictions, providing more operational freedom.

Who is the CEO of Air France-KLM and what did he say about the recent developments?

Benjamin Smith, the CEO, called the full repayment of state aid a significant milestone and expressed confidence in the airline's transformation.