June 30, 2020 | Cbonds
KLM (https://premium.cbonds.com/company/32055/) will take a government bailout of € 3.4 billion and present a restructuring plan in July
The aviation industry is one of the most affected due to the COVID-19 pandemic.
The Dutch part of Air France KLM will receive financing to deal with coronavirus effects. On June 26, the Dutch government announced its readiness to provide a direct loan of 1 billion euros to KLM for a period of 5.5 years and a 90% guarantee on a five-year revolving credit line of 2.4 billion euros provided by a consortium of 11 banks.
The Dutch government took such measures after the French government offered 7 billion euros in aid to Air France in April. Meanwhile, the government of the Netherlands will appoint an observer to the company's board to monitor the targeted use of taxpayer funds, but will not get control over the business.
❌Such a step will certainly lead to reforms and painful cuts in wages, layoffs, the freezing of dividends and bonuses, as well as the mandatory implementation of the environmental program that became a part of the state support program. The company's overall expenses must be cut by 15%.
The financing will allow KLM to continue its operations until at least 2021, and the government is still ready to provide additional assistance if necessary.
Company: KLM Royal Dutch Airlines
|Full company name||Koninklijke Luchtvaart Maatschappij N.V.|
|Country of risk||Netherlands|
|Country of registration||Netherlands|