Air France-KLM and Apollo Global Management sign a definitive agreement for a quasi-equity financing of €1.3 billion, with a potential upsize to €1.5 billion
26 Octubre 2023 - 1:00PM
Air France-KLM and Apollo Global Management sign a definitive
agreement for a quasi-equity financing of €1.3 billion, with a
potential upsize to €1.5 billion
Paris, October 26, 2023
Air France-KLM and Apollo Global
Management sign a definitive agreement for a quasi-equity financing
of €1.3 billion, with a potential upsize to €1.5
billion
Air France-KLM and Apollo Global Management
(NYSE: APO) today announced to have signed a definitive agreement
between Apollo-managed funds and entities and a dedicated operating
affiliate of Air France-KLM regarding a €1.3 billion financing,
accounted as quasi-equity under IFRS, with the option for Apollo to
increase the nominal amount up to €1.5 billion in total, prior to
closing.
This dedicated operating affiliate of Air
France-KLM will hold the trademark and most of the commercial
partners contracts related to Air France and KLM’s joint loyalty
program (Flying Blue). The affiliate will become the exclusive
issuer of miles for the airlines of the Group and partners,
enabling Flying Blue’s scalability and enhancing its growth
prospects.
Under the agreement, Apollo-managed funds will
subscribe to perpetual bonds issued by this dedicated operating
affiliate. The financing will be accounted as equity under IFRS and
is non-dilutive to shareholders. The structure is similar to two
previous financings raised by Air France on its pool of spare
engines in July 2022 and its maintenance activity components in
July 2023.
This transaction will allow Air France-KLM to
make an additional step towards its commitment to restore its IFRS
equity and strengthen its balance sheet, in addition to net profit
generation.
The perpetual bonds will bear a coupon of 6.4%
for the first four years, with the ability to redeem with an
overall financing cost of 6.75% on the first call date.
Air France-KLM will continue to manage and
operate its loyalty program Flying Blue, and Air France and KLM
will keep full ownership rights of their customer database.
The agreed structure will incur no changes for
Flying Blue members. It will not affect social aspects for Air
France, KLM or Air France-KLM employees’ contracts.
The closing of the transaction remains subject
to customary condition precedents, and is expected to take place by
year end.
Deutsche Bank AG and Skadden, Arps, Slate,
Meagher & Flom LLP are acting as exclusive financial and legal
advisors to Air France-KLM. Apollo Global Management was advised by
Barclays PLC as financial advisor, and Milbank LLP, Latham &
Watkins LLP and NautaDutilh as legal advisors. Apollo Capital
Solutions provided structuring and syndication services in
connection with the transaction.
Investor
Relations
Michiel
Klinkers Marouane
Mami
michiel.klinkers@airfranceklm.com mamami@airfranceklm.com
Website: www.airfranceklm.com
- Air France-KLM and Apollo Global Management sign a definitive
agreement for a quasi-equity financing of €1.3 billion, with a
potential upsize to €1.5 billion
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