(CercleFinance.com) – Air France-KLM announces that it has signed a definitive agreement with Apollo Global Management for a quasi-equity financing of 500 million euros for the engineering and maintenance components business ( MRO) of Air France.
Subject to customary closing conditions, Apollo will subscribe to perpetual bonds issued by an operating subsidiary of Air France which will hold a set of components dedicated to its engineering and maintenance activities.
This financing will be accounted for as equity under IFRS. The proceeds of the transaction will be allocated to the general needs of the group and to the financing of components related to the maintenance activity.
The perpetual bonds will bear interest at 6.9% for the first three years, after which incremental increases and a cap will apply. Air France will have the option of reimbursing them at any time beyond the third year.