Lufthansa shareholders have voted in favour of a €9 billion bailout package from the German government.
It has been a fraught week for Lufthansa.
Its single largest shareholder, Heinz-Hermann Thiele, who owns 15% of the company, only confirmed support for the bailout package on Wednesday night. He had previously indicated the package, which involves the German government taking a 20% stake in Lufthansa and gaining two seats on its supervisory board, had allowed the state to acquire a stake at too low a price and it should be renegotiated.
The bailout package required a 75% majority in favour to secure shareholder support. Shareholders ultimately voted 98% in favour.
Had shareholders voted against the package, this would have prompted a standoff with the German government. It could have forced Lufthansa into bankruptcy proceedings. In all likelihood, as Lufthansa has such a dominant position at its major hubs such as Frankfurt and Munich, with around 70% of slots, it would have been deemed too big to fail.
Of the €9 billion in aid, only €3 billion has to be repaid in the next three years. The remaining €6 billion has been approved by the European Commission.
Other Lufthansa Group airlines have already received state support. Austrian Airlines has received €150 million in direct aid, with conditions, and €300 million in state guaranteed loans from the Austrian government. SWISS has has received CHF1.5 billion in state guaranteed loans.Continue reading “Lufthansa Secures €9bn Bailout From German Government”