Air France-KLM announces capital increase of one billion euros

Air France-KLM has announced the "success" of a capital increase that allowed it to raise 1.036 billion euros which sees the French State's stake in the airline double to 28.6 percent.

Air France-KLM CEO Ben Smith said that the success of the company's capital increase "testifies to the confidence of investors in the prospects of the group, whose financial solidity has been strengthened by these initial recapitalisation measures."

According to a press release issued by the airline on Monday, Air France will use the allocated amount to consolidate its liquidity and finance general corporate purposes in the context of the Covid-19 crisis.

The press release further stated that the capital increase will result in the issuance of 213,999,999 new shares at a price per share of €4.84, that represents approximately 50 percent of the company's existing share capital.

It follows last year's 10.4 billion-euro debt bailout for the group, backed by the French and Dutch governments.

While the new share issue will double the stakes of the French government, it will dilute the Dutch government's equity to 9.3 percent.

China Eastern Airlines will increase its stake in the group from 8.8 percent to 9.6 percent while Delta Air Lines will see its holding diluted to 5.8 percent.