EC approves up to €4B French measure to recapitalize Air France

Air France-KLM will receive as much as 4 billion euros ($4.7 billion) from the French government as part of a recapitalization plan for the indebted carrier, which has been slammed by the pandemic, Report informs referring to Bloomberg.

France will raise its stake in the carrier to up to 30 percent, Air France-KLM said. Up to 1 billion euros in fresh capital will come as part of a shareholder subscription, the European Union said after clearing the added aid. France will also convert an earlier 3 billion-euro loan into hybrid instruments.

Air France-KLM shares were down 1.5% to 5.06 euros at 9:04 a.m. in Paris. They have lost 2.2% this year.

The aid from France will go to Air France-KLM but benefit only the French arm, the EU said. Air France will have to give up 18 daily slots at Orly airport outside Paris to satisfy EU demands.

The Netherlands is continuing talks with the commission on a plan of its own for refinancing KLM, the carrier said.

“France will contribute up to €4 billion to reinforce Air France's equity and help the airline face financial difficulties resulting from the coronavirus outbreak,” Executive Vice-President Margrethe Vestager, in charge of competition policy, said.