KLM secures loans of 3.4 billion euros to help overcome the

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Roissy, June 26, 2020

KLM secures loans of 3.4 billion euros to help weather the crisis and prepare for the future

On June 25, 2020, the Board of Directors of the Air France-KLM group approved a financial support plan supported by the Dutch government for KLM in the amount of 3.4 billion euros. These loans will allow KLM to overcome the current COVID-19 crisis and prepare for the future.

Dutch state aid to KLM is in addition to the € 7 billion in funding granted by the French state to Air France announced on May 7, 2020.

Following discussions with the Dutch government and several Dutch and international banking institutions, the Air France-KLM group and KLM were able to finalize the various components of a financial package.

This financing includes two loans for KLM and its subsidiaries:

  • A 2.4 billion euros revolving credit facility, granted by 11 banks, including three Dutch banks and eight international banks. The main elements include:
    • 90% guarantee backed by the Dutch state
    • 5 years maturity
    • Coupon at the annual rate equal to EURIBOR (floor at zero) plus a margin of 1.35%
    • A guarantee cost granted by the Dutch state equal to 0.50% in year 1, 1.00% in year 2 and 3, and 2.00% after year 3
  • A direct loan of 1 billion euros, granted by the Dutch state to KLM, with the following main elements:
    • Term loan of 1 billion euros
    • 5.5 years maturity
    • Coupon payable annually at a rate equal to EURIBOR 12 months (floor at zero) plus a margin of 6.25% for year 1, 6.75% for years 2 and 3, and 7.75% for years 4 and 5
    • Subordination to the New Revolving Credit Facility

The revolving credit facility and the direct loan will be drawn on a pro rata basis. Drawings subsequent to the first drawing are subject to certain conditions which are fulfilled by KLM. KLM’s first drawdown on the new revolving credit line will be used to repay and terminate the existing revolving credit line drawn on March 19, 2020 for an amount of € 665 million.

The conditions associated with the direct public loan are linked to the sustainability of the airline as well as to the restoration of KLM’s performance and competitiveness, in particular a global restructuring plan and employee contributions.

KLM has undertaken to suspend the payment of dividends to its shareholders until the full repayment of these two loans.

This state aid, which remains subject to the approval of the European Commission and the Dutch Parliament, will give KLM the necessary means to meet its obligations and adapt in a sector that the global crisis will severely disrupt.

“On behalf of all the employees of the Air France-KLM group, I would like to thank the Dutch State and the financial institutions for their support to KLM in this unprecedented crisis for the airline sector”, declared Benjamin Smith, CEO of Air Groupe France-KLM. “KLM is a strategic asset for the Netherlands, and I am happy to have seen the country rally to this national champion during this very difficult time. I am also proud to note that KLM plays a vital role in the Dutch economy, and we are ready to do what we can to help it in its recovery process. Thanks to the support of the Dutch and French States, I am sure that the Air France-KLM group will emerge stronger than ever from this crisis. “

“Due to COVID-19, KLM is currently going through an unprecedented crisis,” said Pieter Elbers, CEO of KLM. “The financial package is necessary to secure the long and difficult road to recovery in the period to come. This is a very important step. and I express my gratitude on behalf of all KLM colleagues to the Dutch state and the banks for the confidence they place in our organization and in our future. With the financial package, KLM can continue to play its important social role in economic recovery and sustainability. period to come, we will work on the restoration of the network of lines and, on the other hand, on the elaboration of the restructuring plan and the far-reaching conditions which have been imposed on the package.

Investor relations Press service

Olivier Gall Wouter van Beek

+33 1 49 89 52 59 +33 1 49 89 52 60 +33 1 41 56 56 00

[email protected] [email protected]

Website: www.airfranceklm.com

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