AFLYY Air France ADS (PK)

By Joshua Kirby

Shares in Air France-KLM lost ground Wednesday after the Franco-Dutch airline group said it was stepping up repayment of pandemic-era state aid via an issuance of bonds convertible into shares worth around 300 million euros ($310.5 million).

At 843GMT, shares traded 9.6% lower at EUR1.27.

The deeply subordinated undated bonds can be converted into new shares or exchanged for existing ones, equivalent to a maximum 200 million underlying shares and a nominal maximum amount of around EUR300 million, via a placement to qualified investors only, AF-KLM said Wednesday.

The net proceeds will be used to accelerate repayment of EUR4 billion in French state aid, granted in April 2021 to relieve the financial squeeze of the pandemic.

The convertible bonds will have a nominal value of EUR100,000 and a settlement date of Wednesday next week, AF-KLM said. The reference share price will meanwhile be based on the average price of the group's Paris-listed shares Wednesday, while the bonds' conversion or exchange value will be set at a premium of 20%-25% over this price, the company said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

November 16, 2022 04:08 ET (09:08 GMT)

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