Air France board agrees to KLM exchange offer: union (29/09/2003)
PARIS (AFP) The Air France board of directors gave its approval to an exchange offer for shareholders of the Dutch airline KLM, with which it is close to a merger-takeover, a union member of the board told AFP.
"For the moment, the board has approved a letter of intent that will be released by the company," said Yvon Touil of the CGT union.
Asked whether the letter concerned an exchange offer, Touil replied "yes." He declined to give further details.
Air France President Jean-Cyril Spinetta has insisted any decision remain confidential until Tuesday morning.
Air France and KLM are said to be close to the launch of a merger-takeover that would create the biggest airline in the world in terms of sales, ahead of American Airlines.
Francois Cabrera, head of the French airline's chapter of the CFDT trade union, said earlier Monday that Air France would announce the exchange offer for KLM shareholders Tuesday, pending approval by the airline's board.
"Management told us we will only be authorized to give details of the offer, i.e. the rates of exchange, tomorrow, because the board meeting this evening must authorize the president to launch the operation," he told media following a works council meeting in Paris.
To provide fresh Air France shares, the company would carry out a capital increase of "around 15 percent", indicated Emmanuel Jahan of the CFE-CGC union.
CFDT delegate Philippe Decrulle told reporters the operation would extend until April to allow for scrutiny by the European Commission, which cried foul on September 17 when Paris tried to ram through a bail-out of the engineering giant Alstom.
Agence France-Presse