Air France-KLM has entered into exclusive discussions with Apollo Global Management for an €500m capital injection to an operating affiliate of Air France, which owns a pool of spare engines of the company.
The company said the proceeds of the transaction would enable Air France-KLM to partially redeem the French State perpetual bonds as well as facilitate the financing of future spare engine acquisitions.
The talk is part of the second step of equity strengthening measures that Air France-KLM included at the full year 2021 results presentation.
Sun Country, another airline backed by Apollo, has filed to list on the Nasdaq stock exchange last year despite a troubled time for airlines due to the Covid-19 pandemic. Apollo bought the business in 2017, following a six-year hold by Marty and Mitch Davis.
Another high-profile deal for Apollo recently is that the firm is said to be in talks with Elon Musk to provide further preferred equity financing to reduce the $21bn cash contribution he has committed in the Twitter acquisition deal, although later report suggested that private equity firms are mostly staying away from the transaction.
In other deal news, the asset manager took vehicle part maker Tenneco private in a $7.1bn deal in February and anchored a $500m continuation fund at Behrman Capital together with BlackRock in March.
Apollo has raised more than $24bn in 2017 for its biggest-ever fundraise for private equity.
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