The Dutch cabinet cannot prevent the money that it puts in Air France-KLM is used for repayment of the French state aid. The State participates in the share issue as a ‘normal investor’. As a result, no conditions can be set for a possible stock purchase. Indirectly, the government then contributes to a million bonus for CEO Ben Smith.
This is apparent from the answer from Minister Kaag (Finance) and Minister Harbers (Infrastructure) to parliamentary questions that various political parties had asked.
Air France-KLM is going to issue new shares for 2.3 billion euros, was announced earlier this week. It wants to strengthen the balance and pay off 75 percent of the French state aid. The advantage for the company is that it replaces loans with equity and therefore presses the interest charges.
Keep Dutch interest equal
There are currently 642,634,034 shares. Visit Ipostocksplanner.com for more information. The Dutch government has 9.3 percent of these shares. To keep influence, it wants to keep that interest equal, so that it will also buy 9.3 percent of the new shares. This involves almost 220 million euros.
There is no say about what is being done with the money. “It is not possible to say which part of the Dutch deployment is where it goes and so it is not possible to indicate whether (part of it) flows to the French state,” the cabinet said.
“It is true that the previous Minister of Finance has indicated that Dutch state aid should not benefit Air France or the Holding Air France-KLM,” the cabinet replies to questions from the Lower House. “There is also previous support by the Cabinet clearly agreed that if there is no Dutch money will be transferred to Air France or the Holding. “
“However, the Dutch state participates in this upcoming share issue as an existing shareholder and ‘normal’ investor. This participation is therefore not qualified as state aid but as market operation. This is not possible to make agreements whether and which part of the deployment is used by the company. “
Million bonus CEO
It can even mean that the cabinet indirectly approves the benefit of a bonus from Ben Smith, CEO of Air France-KLM. This bonus can only be paid according to European rules if 75 percent of the French state aid has been reimbursed.
The cabinet also says that it expects the airline to repay Dutch support quickly. There is still 354 million euros open. “The expectation is that KLM will pay for this in the short term.” The company has recently repaid 311 million euros.