The rescue plan will give the government a 20% stake in the group, which has airlines in Germany, Austria, Switzerland and Belgium, and two seats on its supervisory board.
Lufthansa said on Monday in a statement that the Federal Economic Stabilization Fund of Germany, which is used to help companies affected by the coronavirus pandemic, has approved a "stabilization package", which the board of directors of business supports.
The government is injecting up to 5.7 billion euros (6.2 billion dollars) into the airline, earning a return that starts at 4% this year and the following year before increasing. The package also includes a three-year credit facility of up to € 3 billion ($ 3.3 billion), the vast majority of which will come from the German public development bank, KfW.
In addition, the government will acquire a 20% stake in Lufthansa for € 2.56 per share ($ 2.79), or approximately € 300 million ($ 327 million). The government has the option of increasing its stake to 25% plus one share, which allows it to block any potential takeover. He agreed to sell his shares in full by the end of 2023, subject to full reimbursement of his investment of $ 6.2 billion and the share price above the purchase price. The title of Lufthansa, which has almost halved this year, closed Monday at 8.64 € (9.41 $) in Frankfurt.
"Before the pandemic, the business was healthy and profitable and had good prospects for the future, but it is facing an existential emergency due to the current corona crisis," the government said in a statement. "The federal government's stabilization plan takes into account the needs of the company as well as the needs of taxpayers and employees of the Lufthansa group."
Two seats on the Lufthansa supervisory board must be filled in agreement with the German state, said the company, one of which must become a member of the audit committee. These seats will be allocated to "independent experts", according to the government, who said that the financial support measures were accompanied by "extended remuneration restrictions" for senior management.
The airline group may also be required to waive future dividend payments.
"Lufthansa is committed to pursuing sustainability objectives, including the renewal of its fleet," the government said, without providing further details on the environmental conditions linked to the rescue.
Lufthansa said its supervisory and management boards "will meet shortly" to adopt the rescue resolutionswhich are subject to the approval of shareholders and regulatory authorities.
- Mark Thompson contributed to the report. Source link
