Air France-KLM today announced the repayment of €300 million of the outstanding €600 million perpetual hybrid bonds held by the French State, reaching the 75% threshold of Covid-19 recapitalization State aid redemption.

Rhea-AI Summary

Air France-KLM has repaid €300 million of perpetual hybrid bonds held by the French State, surpassing the 75% threshold of Covid-19 recapitalization aid redemption. This repayment is a major step toward fully exiting the Covid-19 state aid program. The company also announced plans to refinance €320 million via new perpetual hybrid bonds issued to the French State, which will not have any associated restrictions. This refinancing aligns with the European Commission's approval of compensation aid granted to Air France without any bans.

Positive

• Repayment of €300 million in bonds enhances financial stability.
• Exceeding the 75% redemption threshold signifies strong recovery.
• Refinancing €320 million allows continued access to capital without restrictions.

Negative

• None.

Paris, 17 March 2023

Air France-KLM today announced the repayment of €300 million of the outstanding €600 million perpetual hybrid bonds held by the French State, reaching the 75% threshold of Covid-19 recapitalization State aid redemption. Air France-KLM also announced the refinancing of €320 million via the issuance of new French state perpetual hybrid bonds.

• Air France KLM has repaid €300 million of outstanding French State perpetual bonds, exceeding the 75% Covid-19 recapitalization aid redemption threshold
• The Group will refinance €320 million through a new issuance of perpetual hybrid bonds with the French State, without any “bans” attached.

In April 2021, Air France-KLM and the French State agreed to convert the direct French State loan of €3 billion, granted by the French State to Air France-KLM in late May 2020, into perpetual hybrid bonds as a Covid-19 recapitalization aid to Air France and Air France-KLM approved by the European Commission on 5 April 2021 (subject to several “bans”).

In 2022 the Group repaid €2.4 billion of the aforementioned €3 billion, leaving €600 million remaining. As announced at the Group’s FY2022 results presentation, Air France-KLM and Air France intend to fully exit the current Covid-19 recapitalization aid and its related “bans” as from April 19^th, 2023.

Following the European Commission’s approval on February 16^th, 2023, of a French State compensation aid granted to Air France without any bans attached, the Group today takes the first step of repaying and exiting the Covid-19 recapitalization State aid. This step enables the Group to exceed the 75% redemption threshold of the Covid-19 recapitalization aid.

Additionally, the Group will refinance €320 million through the issuance of new French State perpetual hybrid bonds as an approved compensation aid to Air France. These new perpetual bonds with no “bans” attached contain similar financial conditions as the one repaid, with non-call date and interest rate step-up postponed by an additional two years (March 2029).

Investor Relations                                                        

Michiel Klinkers                        Marouane Mami                                                            

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

Website: www.airfranceklm.com

Attachment

• PR - repayment of €300 million - finale

FAQ

What is the significance of Air France-KLM repaying €300 million in bonds?

The repayment indicates a significant step in recovering from Covid-19 aid and enhances the company's financial position.

How will the refinancing of €320 million affect Air France-KLM?

The refinancing allows Air France-KLM to maintain liquidity without the constraints of previous state aid restrictions.

What percentage of Covid-19 recapitalization aid has Air France-KLM redeemed?

Air France-KLM has redeemed over 75% of the Covid-19 recapitalization aid.

When will Air France-KLM fully exit the Covid-19 state aid?

Air France-KLM plans to fully exit the Covid-19 state aid by April 19, 2023.

What approval did Air France-KLM receive regarding state compensation aid?

The European Commission approved a new compensation aid to Air France without any bans attached on February 16, 2023.