Air France-KLM nears bailout with improved guarantees - sources
By Laurence Frost and Arno Schuetze PARIS/FRANKFURT (Reuters) - Air France-KLM is moving towards a 10 billion euro ($10.9 billion) government-backed rescue deal, sources said, after France agreed to higher guarantees on loans designed to tide the airline group through the coronavirus crisis.
By Laurence Frost and Arno Schuetze
PARIS/FRANKFURT (Reuters) - Air France-KLM
Paris is ready to vouch for 90% or more of the bank loans to Air France, rather than the 70% initially offered, two people with knowledge of the matter told Reuters. The increased guarantees were first reported by La Tribune on Wednesday.
Air France-KLM representatives and the French finance ministry declined to comment.
Major airlines including Germany's Lufthansa
Banks had been holding out for an improvement on the 70% French guarantees offered for about 4 billion euros in loans to Air France, to be accompanied by close to 2 billion euros in Dutch-backed lending to KLM, Reuters reported on April 3.
The entire package for the Franco-Dutch airline group as a whole now amounts to about 10 billion euros, two sources said, confirming earlier reports in La Tribune and other French media.
In addition to the guaranteed bank loans, Air France is likely to draw on a government emergency fund, increasing its total support to about 8 billion euros, the sources said.
Group Chief Executive Ben Smith is preparing to accelerate a planned restructuring of the Air France short-haul network and the expansion of low-cost division Transavia, the French daily also reported, leading to possible job cuts in France.
The loan spree would also leave an indebted Air France-KLM in need of new capital investment, risking heightened tensions between the two governments - which each own close to 14% of the group and are already at loggerheads over strategy.
Group chairman Anne-Marie Couderc told French senators on Wednesday that talks on a combination of state guarantees and direct loans to Air France should conclude "in coming days", while an agreement on Dutch support for KLM would take longer.
"I don't think we will be able to match up the two timetables, even if that might obviously have been desirable for a clearer overall view of the group's cash requirements," Couderc told a Senate committee hearing.
(Reporting by Laurence Frost and Arno Schuetze; Additional reporting by Anthony Deutsch in Amsterdam; Editing by David Goodman and Emelia Sithole-Matarise)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.