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Air France-KLM raises $2.4 billion from latest rights issue

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FILE PHOTO: The coronavirus disease (COVID-19) outbreak in Amsterdam
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PARIS (Reuters) -French-Dutch airline Air France-KLM said on Tuesday it raised around 2.26 billion euros ($2.36 billion) through its latest capital increase, with the total demand for new shares amounting close to 2.6 billion.

The proceeds from the rights issue will be mostly used to repay an aid package to the French state, and reduce related financial costs and other debt, the company said, confirming previously announced plans.

The airline launched the capital increase — a widely anticipated move — in May as part of its efforts to win shareholder backing to look beyond the pandemic and invest in the resurgent air travel.

The issue was led by a big investment from logistics firm CMA CGM, which used it to take a 9% stake in the airline as it bet on growing demand for flying goods globally amid supply chain challenges.

The value of the equity stakes held by the French and Dutch governments, however, remained unchanged even after the issue, while a chunk held by China Eastern Airlines was diluted to 4.7% from 9.6% before the capital hike.

"The success of our capital increase is a strong demonstration of the confidence that our existing shareholders and new investors have in the prospects of Air France-KLM", the company's boss, Ben Smith, said in a statement.

($1 = 0.9592 euros)

(Reporting by Tassilo Hummel; Editing by Sudip Kar-Gupta and Uttaresh.V)

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