Air France is set to gain a substantial EUR 500 million investment boost for its Engineering and Maintenance (MRO) arm. The capital injection via asset management firm Apollo will support future component purchases by the carrier.
Apollo has recently announced the signing of an agreement for Apollo-managed funds and affiliated entities to make the EUR 500 million investment into an Air France affiliate dedicated to the airline’s Engineering and Maintenance activities.
This strategic partnership aims to provide Air France with a custom capital solution to bolster its balance sheet and support future purchases of components related to maintenance activities.
Strategic capital solution for Air France
The bespoke transaction between Apollo and Air France is a testament to Apollo’s cross-platform expertise, particularly in aviation and high-grade partnerships.
By offering a custom capital solution, Apollo aims to empower Air France in executing its strategic plans, ensuring the airline remains at the forefront of the industry.
This substantial investment is poised to have a significant impact on Air France’s operational capabilities and long-term growth.
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Strengthening Air France’s balance sheet
With Apollo’s EUR 500 million investment, Air France-KLM will gain a much-needed boost to its balance sheet. Strengthening the balance sheet is a crucial move for any airline, especially in an ever-evolving and competitive market.
This capital injection allows the French carrier to enhance its financial resilience and navigate through challenging times while seizing new opportunities for expansion and innovation.
The capital injection for MRO operations comes at a time when the global commercial airline sector is grappling with supply chain issues for engineering and maintenance activities.
An on-going partnership
This investment marks the second transaction between Apollo and Air France-KLM within a year. In the previous deal, Apollo funds, affiliates, and clients committed a total of EUR 1 billion.
This ongoing partnership showcases the mutual trust and confidence between the two industry giants. By continuing to work together, they can leverage their collective expertise and resources to drive innovation and success in the aviation sector.
Apollo’s versatility and differentiation
Apollo’s ability to provide custom capital solutions distinguishes it from other platforms in the market. Their versatility allows them to tailor their offerings to meet the specific needs of leading companies like Air France-KLM.
The capacity to structure creative and scalable solutions at various capital costs sets Apollo apart as an attractive partner for both affiliated and third-party insurers, as well as other institutional clients.
This flexibility positions them as a go-to financial partner for complex transactions in diverse industries.
Legal and advisory support
Milbank LLP and Jeantet have been appointed as legal counsel to the Apollo Funds, ensuring a smooth and compliant transaction process. Apollo Capital Solutions played a vital role in providing structuring and syndication services for the deal.
On the other side, Deutsche Bank AG and Skadden, Arps, Slate, Meagher & Flom LLP served as exclusive financial and legal advisors to Air France-KLM, ensuring the airline’s interests were represented throughout the negotiation process.
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