Silent applause

21 May 2020 By Ed Cropley Follow @edwardcropley

The German flag carrier will get a 9 bln euro bailout, including new shares and non-voting stock. The government gets a 25% stake on the cheap, and a more generous payout than other investors. Shareholders can at least be grateful that politicians are staying out of the cockpit.

This content is for Subscribers only

Context News

Airline Deutsche Lufthansa said on May 21 it was in “advanced discussion” with the German government over a 9 billion euro bailout.

German state bank KfW will lend Lufthansa 3 billion euros. The rest of the package will be split between a so-called silent participation, a capital increase and a convertible bond, all provided by Germany’s Economic Stabilisation Fund, WSF.

The capital increase will give the government a 20% stake in Lufthansa, while the convertible bond can be exchanged for shares totalling another 5% of the group’s voting stock.

The WSF said it would only fully exercise its voting rights “in exceptional circumstances, such as protection against a takeover”.

Lufthansa shares were up 5.3% at 8.34 euros by 0758 GMT on May 21.

Context News

Airline Deutsche Lufthansa said on May 21 it was in “advanced discussion” with the German government over a 9 billion euro bailout.

The capital increase will give the government a 20% stake in Lufthansa, while the convertible bond can be exchanged for shares totalling another 5% of the group’s voting stock.

The WSF said it would only fully exercise its voting rights “in exceptional circumstances, such as protection against a takeover”.

Lufthansa shares were up 5.3% at 8.34 euros by 0758 GMT on May 21.

Email a friend

Please complete the form below.

Required fields *