State lifts Air France stake to win vote

Δημοσιεύθηκε: 8 Μαΐου 2015 - 11:51

The French government is increasing its stake in Air France to ensure that a new law granting double voting rights to long-term shareholders is adopted by the airline company at its annual meeting in two weeks' time.

On Friday, Emmanuel Macron, economy minister, and Michel Sapin, finance minister, said that the state would buy another 1.7 per cent of Air France's shares, lifting its total stake to 17.6 per cent. This shareholding should enable the government to block a resolution put forward by the airline's management to maintain the existing one-share-one-vote system. Air France's resolution needs two-thirds of investors' votes to pass.

"Those double voting rights are already a reality within the portfolio of companies owned by the state as well as at a majority of CAC 40 companies," the ministers said in a statement.

Shares in Air France, which holds its annual general meeting on 21 May, surged 4.5 per cent in Paris on the news.

Friday's announcement marks the second time the French government has decided to go head-to-head with the management of a state-backed company to ensure that its Florange law, which was passed last year to foster long-term shareholding, is applied.

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Last month, the state temporarily increased its stake in French carmaker Renault to nearly 20 per cent, provoking the ire of the group's chief executive Carlos Ghosn. By doing so, the government controlled enough shares to vote down Renault's proposal to keep the one-share-one-vote system.

"Some managers believe shareholders are a nuisance," Mr Macron told the Financial Times in an interview, ahead of Renault's annual meeting. "The balance of power is in the market. We operate in the market, so I try to shift the balance of power."

Some investors have criticised the Florange law, claiming it dissociates economic interest from voting rights. As a result, it has been blocked by shareholders at cosmetics company L'Oreal, construction group Vinci, reinsurance company Scor and real estate group Unibail.

However, Vincent Bollore - Vivendi's chairman and largest investor, who has faced criticism from US activist investor Peter Schoenfeld over his strategy - was able to secure investor backing for the Florange law at the media group.

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