Air France-KLM launches an offering of deeply subordinated undated
bonds convertible into new shares and/or exchangeable for existing
shares for a nominal amount of approximately EUR 300m
Paris, 16 November 2022
Air France-KLM launches an offering of deeply
subordinated undated bonds convertible into new shares and/or
exchangeable for existing shares for a nominal amount of
approximately EUR 300m.
- The offering will be conducted by way of a placement to
qualified investors only
- Net Proceeds of the offering are meant to be fully allocated to
the repayment of the perpetual bonds held by the French State,
issued in April 2021
- 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
optimize financial costs
Air France-KLM S.A.
(the “Company”) today announced the launch of an offering of
undated deeply subordinated unsecured bonds convertible into new
shares and/or exchangeable for existing shares (the “Bonds”), for a
nominal amount of approximately EUR 300 million within the limits
of a maximum number of 200 million underlying shares by way of a
placement to qualified investors only (the
“Offering”).
CMA CGM has expressed
the intention to participate to the placement pro-rata to its
current shareholding of 9.0%.
The net proceeds of
the Offering will be fully allocated to the repayment of the
perpetual bonds held by the French State, issued in April 2021.
Main terms of
the Bonds
The Bonds will be
issued at par and will have a nominal value of €100,000 (the
“Principal Amount”) and will be convertible and/or exchangeable
into new and/or existing shares of Air France-KLM (the
“Shares”).
The final terms of the
Bonds are expected to be determined today and the settlement date
of the Bonds is expected to take place on 23 November 2022.
The reference share
price will be equal to the volume-weighted average trading price
(VWAP) of Air France-KLM’s shares on the regulated market of
Euronext in Paris (“Euronext Paris”) as from the opening of trading
on 16 November 2022 until the close of trading on the same day. The
conversion/exchange price of the Bonds will be set at a premium of
20% to 25% over the reference share price.
The Bonds will
represent direct, unconditional, deeply subordinated and unsecured
obligations of the issuers ranking pari passu without any
preference among themselves and (1) equally and rateably with any
other existing or future deeply subordinated obligations (ii) in
priority to present and future equity securities of the issuer and
(iii) junior to all present and future Unsubordinated Obligations,
Ordinary Subordinated Obligations of the Issuer and prêts
participatifs granted to, and titres participatifs issued by, the
Issuer (as defined in the Terms and Conditions of the Bonds).
An application will be
made for admission of the Bonds to trading on the non-regulated
open market of Euronext in Paris (Euronext AccessTM) within one
month following the Issue Date.
Interests
From the issue date
until 23 November 2025 (exclusive), the Bonds will bear interest at
a nominal annual rate comprised between 5.75% and 6.50% payable
quarterly in arrear on 23 November, 23 February, 23 May and 23
August of each year (or the next working day if any of those dates
are a non-working day) (each, an "Interest Payment Date"), and on
the first time on 23 February 2023, subject to any interest payment
suspension by the Company (in accordance with the Bonds’ terms and
conditions).
From 23 November 2025
(inclusive), the Bonds will bear interest at a rate equal to 1,300
basis points above the applicable 3 year-Mid-Swap Rate in Euro as a
reference rate. The reference rate will be subject to a reset every
three years thereafter. Interest will be payable quarterly in
arrear on each Interest Payment Date and, as the case may be, for
the first time on 23 February 2026, subject to any interest payment
suspension.
In the event of a
change of control, the annual rate for the fixed coupon or the
reset reference rate coupon, as the case may be, will be increased
by 500 basis points.
On any Interest
Payment Date, the Company may decide, subject to certain
conditions, to suspend payment of interest in respect of the Bonds
for the relevant interest period, subject to having notified
Bondholders at least 15 business days prior to the relevant
Interest Payment Date. All interest in respect of the Bonds that is
not paid at an Optional Interest Payment Date will constitute
"Deferred Interest". Any amount of Deferred Interest will bear
interest (to the full extent permitted by law) from the interest
payment suspension date for any period exceeding 12 months at the
interest rate applicable to the Bonds at the relevant period. The
amount of accrued interest (the "Additional Interest") in respect
of Deferred Interest will become due and payable in the same manner
as Deferred Interest. Deferred Interest (as well as the
corresponding amount of Additional Interest) may be paid in full or
in part at any time at the Company's option, but all Deferred
Interest (as well as the corresponding amount of Additional
Interest) in respect of all the Bonds will become payable in full
in specific cases, including if the Company decides the payment of
a dividend or of an interim dividend or repurchase of any equity
security or upon redemption of all outstanding Bonds.
Redemption of
the Bonds
The Bonds are undated,
subject to cases of early redemption at the Company's option and
will only be repayable in the event of the liquidation of the
Company or upon the expiry of the term indicated in the Company's
by-laws (unless extended in accordance with applicable
legislation).
The Company may, at
its option proceed with early redemption of all, but not some, of
the Bonds at par plus accrued interest, Deferred Interest and, as
the case may be, Additional Interest (the “Early Redemption Price”)
in accordance with the provisions of Dividend and Capital
Stopper:
- for the first time on 23 November
2025, and then on each Interest Payment Date;
- in case of a change of
control;
- from 14 December 2024 until 23
November 2025 (excluded), if the arithmetic average, calculated
over any period of 10 trading days falling within any period of 20
consecutive trading days preceding the publication of the early
redemption notice of the daily products of the Company’s closing
trading share price on Euronext Paris and the conversion/exchange
ratio in effect on each trading day during such period exceeds 130%
of the principal amount of the Bonds;
- and if the total number of the
Bonds outstanding is less than 15% of the number of Bonds
originally issued
Conversion/Exchange rights
Bondholders may
exercise their conversion/exchange right at any time 40 days after
the issue date (inclusive) until the 10th business day (exclusive)
preceding the earlier of the two following dates: 23 November 2025,
or, as the case may be, the date set for any early redemption.
The
conversion/exchange ratio is set at the Principal Amount divided by
the prevailing initial conversion/exchange price, subject to
subsequent adjustments (as set out in the terms and conditions of
the Bonds).
Dilution
For illustrative
purpose, when considering an offering of Bonds for a maximum amount
of approximately €300 million, a nominal value of €100,000 per Bond
and a conversion/exchange price calculated on the basis of a
reference share price corresponding to a €1.4035 closing share
price on 15 November 2022, and a 22.5% conversion premium
corresponding to the issue premium mid-range, dilution would
represent approximately 6.8% of the outstanding share capital, if
the Company decided to exclusively deliver new shares upon
conversion.
Placement and
offer
The offering will be
conducted in accordance with Article L.411-2, 1° of the French
Monetary and Financial Code (Code monétaire et financier), as per
the authorization granted by the Company’s extraordinary general
meeting held on May 26th, 2021 (23rd resolution) as amended by the
Company’s extraordinary general meeting held on May 24th, 2022
(19th resolution), through an offer to qualified investors only, as
defined in article 2 point (e) of Regulation (EU) n° 2017/1129, in
France and outside France (excluding the United States of America,
Canada, Australia and Japan). There will be no prospectus, offering
circular or any similar offering document produced in connection
with the offering.
Deutsche Bank
Aktiengesellschaft, HSBC Continental Europe and Natixis are acting
as structuring banks and as joint global coordinators of the
Offering (the “Structuring Banks” and the “Joint Global
Coordinators”). Crédit Agricole Corporate and Investment Bank is
acting as co-global coordinator (the “Co-Global Coordinator”), and
together with the Joint Global Coordinators and with Société
Générale as joint bookrunners (the “Joint Bookrunners”).
Lock-Up
In the context of the
offering, the Company will agree to a lock-up undertaking ending 90
calendar days following the issue date of the Bonds (inclusive),
subject to certain exceptions or waiver of the Joint Global
Coordinators and Joint Bookrunners.
Subscription
intention from existing shareholders
CMA CGM who holds 9.0%
of Air France-KLM as of the date of this press release, has
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.
Public
information
The offering of the
Bonds is not subject to a prospectus approved by the French
Financial Market Authority (Autorité des marchés financiers) (the
“AMF”). This press release does not constitute or form part of any
offer or solicitation to purchase or subscribe for or to sell
securities.
Detailed information
on Air France-KLM, including its business, results, prospects and
related risk factors are described in the Company’s universal
registration document filed with the AMF on April 4th, 2022 under
number D.22-0236 (the “URD”) as supplemented by an amendment to the
URD filed with the AMF on May 23rd, 2022, which are available
together with all the press releases of the Company, the half-year
financial report of the Company for the six-month period ended 30
June 2022, and the press release for the three-month period ended
30 September 2022, on the Company’s website
(www.airfranceklm.com).
Investor Relations |
|
Press |
Frederic Kahane |
Michiel Klinkers |
|
|
|
+33 1 41 56 56
00 |
frkahane@airfranceklm.com |
Michiel.klinkers@airfranceklm.com |
Mail.mediarelations@airfranceklm.com |
Website: www.airfranceklm.com
IMPORTANT
NOTICE
This press release may
not be released, published or distributed, directly or indirectly,
to U.S. Persons or in or into the United States of America,
Australia, Canada or Japan. The distribution of this press release
may be restricted by law in certain jurisdictions and persons into
whose possession any document or other information referred to
herein comes, should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such
jurisdiction.
No communication or
information relating to the offering of the Bonds or the Repurchase
may be transmitted to the public in a country where there is a
registration obligation or where an approval is required. No action
has been or will be taken in any country in which such registration
or approval would be required. The issuance by the Company or the
subscription of the Bonds may be subject to legal and regulatory
restrictions in certain jurisdictions; none of Air France-KLM and
the Joint Global Coordinators and Joint Bookrunners do not assume
any liability in connection with the breach by any person of such
restrictions.
This press release is
an advertisement and not a prospectus within the meaning of
Regulation (EU) 2017/1129 (the “Prospectus
Regulation”) and of Regulation (EU) 2017/1129 as it forms
part of the United Kingdom domestic law by virtue of the European
Union (Withdrawal) Act 2018 (the “UK Prospectus
Regulation”). This press release is not an offer to the
public other than to qualified investors, or an offer to subscribe
or designed to solicit interest for purposes of an offer to the
public other than to qualified investors in any jurisdiction,
including France.
The Bonds have been
and will be offered only by way of an offering in France and
outside France (excluding the United States of America, Australia,
Canada, Japan and any other jurisdiction where a registration
process or an approval would be required by applicable laws and
regulations), solely to qualified investors as defined in article 2
point (e) of the Prospectus Regulation and in accordance with
Article L. 411-2, 1° of the French Monetary and Financial Code
(Code monétaire et financier) and article 2 of the UK Prospectus
Regulation. There will be no public offering in any country
(including France) in connection with the Bonds, other than to
qualified investors. This press release does not constitute a
recommendation concerning the issue of the Bonds. The value of the
Bonds and the shares of Air France-KLM can decrease as well as
increase. Potential investors should consult a professional adviser
as to the suitability of the Bonds for the person concerned.
Prohibition of sales to
European Economic Area retail investors
No action has been
undertaken or will be undertaken to make available any Bonds to any
retail investor in the European Economic Area. For the purposes of
this provision:
a. the expression
"retail investor" means a person who is one (or
more) of the following:
i. a retail client
as defined in point (11) of Article 4(1) of Directive 2014/65/EU
(as amended, "MiFID II"); or
ii. a customer
within the meaning of Directive (EU) 2016/97, as amended, where
that customer would not qualify as a professional client as defined
in point (10) of Article 4(1) of MiFID II; or
iii. not a
“qualified investor” as defined in the Prospectus
Regulation; and
b. the expression
“offer" includes the communication in any form and
by any means of sufficient information on the terms of the offer
and the Bonds to be offered so as to enable an investor to decide
to purchase or subscribe the Bonds.
Consequently, no key
information document required by Regulation (EU) No 1286/2014 (as
amended, the "PRIIPs Regulation") for offering or
selling the Bonds or otherwise making them available to retail
investors in the European Economic Area has been prepared and
therefore offering or selling the Bonds or otherwise making them
available to any retail investor in the European Economic Area may
be unlawful under the PRIIPs Regulation.
Prohibition of sales to UK
retail Investors
No action has been
undertaken or will be undertaken to make available any Bonds to any
retail investor in the United Kingdom (“UK”). For
the purposes of this press release:
a. the expression
“retail investor” means a person who is one (or
more) of the following:
i. a retail client,
as defined in point (8) of Article 2 of Regulation (EU) No 2017/565
as it forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018 (“EUWA”); or
ii. a customer
within the meaning of the provisions of the FSMA and any rules or
regulations made under the FSMA to implement Directive (EU)
2016/97, where that customer would not qualify as a professional
client, as defined in point (8) of Article 2(1) of Regulation (EU)
No 600/2014 as it forms part of domestic law by virtue of the EUWA;
or
iii. not a qualified
investor as defined in Article 2 of the UK Prospectus Regulation;
and
b. the expression an
“offer” includes the communication in any form and
by any means of sufficient information on the terms of the offer
and the Bonds to be offered so as to enable an investor to decide
to purchase or subscribe for the Bonds.
Consequently no key
information document required by Regulation (EU) No 1286/2014 as it
forms part of domestic law by virtue of the EUWA (the “UK
PRIIPs Regulation”) for offering or selling the Bonds or
otherwise making them available to retail investors in the United
Kingdom has been prepared and therefore offering or selling the
Bonds or otherwise making them available to any retail investor in
the United Kingdom may be unlawful under the UK PRIIPs
Regulation.
MIFID II
product governance / Professional investors and ECPs only target
market – Solely for the purposes of each manufacturer’s
product approval process, the target market assessment in respect
of the Bonds has led to the conclusion that: (i) the target market
for the Bonds is eligible counterparties and professional clients,
each as defined in MiFID II; and (ii) all channels for distribution
of the Bonds to eligible counterparties and professional clients
are appropriate. Any person subsequently offering, selling or
recommending the Bonds (a “distributor”) should
take into consideration the manufacturers’ target market
assessment; however, a distributor subject to MiFID II is
responsible for undertaking its own target market assessment in
respect of the Bonds (by either adopting or refining the
manufacturers’ target market assessment) and determining
appropriate distribution channels.
France
The Bonds have not
been and will not be offered or sold or cause to be offered or
sold, directly or indirectly, to the public in France other than to
qualified investors. Any offer or sale of the Bonds and
distribution of any offering material relating to the Bonds have
been and will be made in France only to qualified investors
(investisseurs qualifiés), as defined in article 2 point (e) of the
Prospectus Regulation, and in accordance with Article L.411-2 1° of
the French Monetary and Financial Code (Code monétaire et
financier).
United Kingdom
This press release is
addressed and directed only (i) to persons located outside the
United Kingdom, (ii) to investment professionals as defined in
Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the
“Order”), (iii) to high net worth companies, and
other persons to whom it may lawfully be communicated, falling
within by Article 49(2) (a) to (d) of the Order (the persons
mentioned in paragraphs (i), (ii) and (iii) all deemed relevant
persons (the “Relevant Persons”)). The Bonds and,
as the case may be, the shares to be delivered upon exercise of the
conversion rights (the “Financial Instruments”),
are intended only for Relevant Persons and any invitation, offer or
agreement related to the subscription, tender, or acquisition of
the Financial Instruments may be addressed and/or concluded only
with Relevant Persons. All persons other than Relevant Persons must
abstain from using or relying on this document and all information
contained therein.
This press release is
not a prospectus which has been approved by the Financial Conduct
Authority or any other United Kingdom regulatory authority for the
purposes of Section 85 of the Financial Services and Markets Act
2000.
United States of
America
This press release may
not be released, published or distributed to U.S. Persons or in or
into the United States (including its territories and possessions,
any state of the United States and the District of Columbia). This
press release does not constitute an offer or a solicitation of an
offer of securities in the United States or to, or for the account
or benefit of, U.S. Persons. The Bonds and the shares deliverable
upon conversion or exchange of the Bonds described in this press
release have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended (the “Securities
Act”), or the securities laws of any state of the United
States, and such securities may not be offered, sold or otherwise
transferred in the United States or to, or for the account or
benefit of, U.S. persons absent registration under the Securities
Act or pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements thereof and
applicable state or local securities laws.
The securities of Air
France-KLM have not been and will not be registered under the
Securities Act and Air France-KLM does not intend to make a public
offer of its securities in the United States or to U.S. Persons.
Terms used in this paragraph have the meanings given to them by
Regulation S under the Securities Act.
Australia, Canada and
Japan
The Bonds may not and
will not be offered, sold or purchased in Australia, Canada or
Japan. The information contained in this press release does not
constitute an offer of securities for sale in Australia, Canada or
Japan.
The distribution of
this press release in certain countries may constitute a breach of
applicable law.
- 20221116 Air France-KLM launches an offering of deeply
subordinated undated bonds convertible into new shares EN
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