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Lufthansa seeking US$9.71b bailout

Lufthansa seeking US$9.71b bailout

FILE PHOTO: Planes of German airline Lufthansa are parked at Frankfurt airport, Germany. REUTERS/Ralph Orlowski

FRANKFURT: Lufthansa on Thursday (May 7) said it is negotiating a 9 billion euro (US$9.71 billion) "stabilisation package" with Germany's Federal Economic Stabilization Fund, confirming an earlier Reuters report.

The bailout includes a non-voting capital component, known as a so-called silent participation, a secured loan, and a capital increase which may leave the German government with a shareholding of up to 25 per cent plus one share, the company said.

"The Executive Board of Deutsche Lufthansa AG is continuing negotiations with the aim of ensuring the future viability of the company for the benefit of its customers and employees," the company said in a regulatory statement.

Various alternatives of a capital increase are being discussed, including an increase at the nominal value of the share, if necessary after a capital cut, Lufthansa added.

As a condition of the bailout, Lufthansa may have to waive future dividend payments and provide supervisory board representation for members of Germany's stabilisation fund, the company said.

Last month Reuters reported that the airline group was seeking a 9 billion euro rescue package after travel bans grounded 700 of its aircraft, leading to a 99 per cent drop in passenger numbers. 

Source: Reuters

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