Air France-KLM in talks on multibillion euro state-backed loan package
[PARIS] Air France-KLM is in talks with banks to receive billions of euros in loans guaranteed by the French and Dutch governments, as the airline group braces for a sustained coronavirus shutdown, sources told Reuters.
The two states, which each own 14 per cent of Air France-KLM, have paused a long-running boardroom feud to address the cash crunch, according to three people close to the discussions.
Details and amounts are not finalised and could change, the people said. Under the most likely scenario, Air France may get as much as four billion euros (S$6.21 billion) in French-guaranteed loans while KLM receives close to two billion euros backed by The Hague, one source said.
The group has appointed BNP and Societe Generale to advise on refinancing, two of the sources said.
Both banks declined to comment.
"We are naturally in constant discussions with both governments," an Air France-KLM spokesperson said, declining further comment.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The French and Dutch governments also declined to comment in detail on the Air France-KLM talks. Both countries have expressed willingness to offer financial help.
"We've been in discussions for a long period of time with KLM and Air France and very specifically with the French state," Dutch Finance Minister Wopke Hoekstra told Reuters on Wednesday. "It's extremely important to help this vital company through these difficult times."
Governments around the world are scrambling to prop up major airlines that are at risk of bankruptcy as the pandemic gathers pace, gutting travel demand and bringing traffic to an indefinite standstill.
The US Senate approved a US$58 billion bailout for the American aviation industry on March 25. In Europe, Norwegian Air and SAS have received pledges of state support, while Lufthansa is poised to receive billions in aid.
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Transport & Logistics
Tesla profits tumble but shares rise on new vehicle plan
Volvo Cars see good demand this year after higher Q1 unit sales
Capital A chief Fernandes defers retirement, renews contract for five years
Victims’ families to urge US prosecute Boeing over fatal crashes
Tesla could start selling Optimus robots by the end of next year, Musk says
FAA probes union claims Boeing retaliated against two engineers in 2022