The bailout package will give the government a 20% stake in the group, which owns airlines in Germany, Austria, Switzerland and Belgium, and two seats on its supervisory board.
The government is injecting up to € 5.7 billion ($ 6.2 billion) into the airline, achieving a yield that starts at 4% this year and then rises. The package also includes a three-year credit line of up to € 3 billion ($ 3.3 billion), most of which will come from the German state-owned 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 to increase its stake to 25% plus a stake, allowing it to block any potential acquisitions. He agreed to sell his shares in full by the end of 2023, subject to full repayment of his $ 6.2 billion investment and the share price is higher than the purchase price. Lufthansa’s stock, which nearly halved this year, closed in Frankfurt on Monday at € 8.64 ($ 9.41).
“Before the pandemic, the company was healthy and profitable and had good prospects for the future, but faces an existential emergency due to the current crown crisis,” said the government in a statement. “The federal government stabilization package takes into account the needs of the company as well as the needs of taxpayers and employees of the Lufthansa group.”
Two posts on the Lufthansa supervisory board are to be assigned in agreement with the German state, the company said, one of which must become a member of the audit committee. These seats will be allocated to “independent experts”, according to the government, according to which financial support measures have resulted in “extensive remuneration restrictions” for managers.
The airline group may also be required to waive future dividend payments.
“Lufthansa is committed to pursuing sustainability goals, including renewing its fleet,” said the government, without providing further details on the environmental conditions associated with the rescue.
Lufthansa said its management and supervisory boards “will meet shortly” to adopt the bailout resolutions package, which are subject to shareholder approval and regulations.
– Mark Thompson contributed to the report.
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