Air France-KLM (OTC:AFLYY) raised €2.26 billion ($2.4 billion) to expand low-cost and transatlantic flights. The airline introduced the funds through a heavily discounted share sale to return a portion of the public subsidy that helped it survive the Covid-19 outbreak, reported Bloomberg.
What happened: The proceeds of the rights issue will be used to decrease debt and reimburse the French government for around €1.7 billion in bonds issued last year and held by the French government, according to the Franco-Dutch airline on Tuesday.
The new shares were sold at a subscription price of €1.17 each or a discount of about 73% to the May 20 close.
Why It's Important: Chief Executive Officer Ben Smith stated that the operation "helps us to reimburse a huge portion of the aid, which is a good thing." He noted that the carrier will now be free to carry out its strategy.
Smith also said the group would consider outside opportunities after the rights issue.
Price Action: AFLLY shares closed lower by 4.39% at $3.16 on Monday.
Photo via Wikimedia Commons
