Air France-KLM gets green light to sell shares to Delta, China Eastern
Air France-KLM shareholders gave the go-ahead for the company's plan to intensify cooperation with Delta Air Lines and China Eastern. The plan involves selling 10 percent of shares to each of the other two airlines, the Telegraaf reports.
The French-Dutch airline group will get a total of over 750 million euros in new capital in the sale of these shares. Delta Air Lines and China Eastern will each get a commissioner seat in exchange for their investment.
According to the company, this deal will ensure even more cooperation between the airlines, and thus will result in additional revenue and cost benefits. It also ensures an even wider choice of flights for Air France-KLM passengers.
A large majority of the shareholders voted for this deal in an additional shareholders meeting. There was some dissatisfaction with the price of 10 euros per share that Delta and China Eastern is paying, as it is less than what Air France-KLM is currently worth on the stock market. But when looking at the average rate over the past year, the new investors are paying a fair price, according to the company.
Air France-KLM will use a third of the money made in selling the shares to buy a 31 percent stake in British Virgin Atlantic. The rest will go towards further reducing debts, according to the newspaper.
Air France-KLM has been working with Delta Air Lines for many years, providing flights between Europe and the United States with interconnections on both sides. The same is true about China Eastern, with flights between Europe and Shanghai, though on a smaller scale.
