PARIS (Reuters) -Air France-KLM said on Wednesday it was offering subordinated bonds convertible into new shares for 300 million euros ($312 million) to strengthen its capital and pay back state aid, sending its shares plummeting.
The shares plunged 13% in early trading as the issue dilutes current shareholders in Air France unless they buy into it.
“This transaction marks a further step in the group’s initiatives to accelerate the repayment of the French state aid, continue to support the strengthening of equity capital, and help optimise financial costs,” the company said in a statement.
The bonds, which can also be exchanged with existing Air France shares, will be offered through a placement to qualified investors, the airline said.
Proceeds will be used to repay bonds held by the French state, it said, adding that shipping company and existing Air France investor CMA CGM, which owns a 9% stake, had expressed the intention to participate to the placement pro-rata to its current shareholding.
“The company is not aware of any subscription intention from its other main shareholders,” it said.
($1 = 0.9613 euros)
(Reporting by Silvia Aloisi, Editing by Dominique Vidalon and Louise Heavens)
