Lufthansa shares slump as bailout battle approaches showdown
Shares in German flag carrier Lufthansa slumped 6.7 per cent this morning as the saga of its mammoth €9bn (£8.1bn) state bailout continued.
Last week, the airline’s largest shareholder, billionaire Heinz Hermann Thiele, announced his objections to the plan, which would see Germany take a 20 per cent stake in the carrier.
A source told Reuters that Thiele would meet with Germany’s finance minister to discuss his objections to the deal today.
In a letter to Lufthansa’s employees, chief executive Carsten Spohr said that the airline was seeking to find a satisfactory solution to the disagreement before its extraordinary general meeting on Thursday.
Last week, the airline warned that unless it secured shareholder support for the deal it would be forced to seek insolvency protection from creditors.
In order to pass, the deal requires the support of two-thirds of Lufthansa’s shareholders. Thiele recently upped his stake to 15 per cent.
Word of Thiele’s dissent first came to light after the billionaire told German media that he thought there could have been an alternative to the deal signed with the government.
Speaking to newspaper FAZ, he said: “I appreciate Spohr, but I’m not satisfied by his statement that everything was examined and that some ideas could not have been implemented”.
“I believe that negotiations could have been more intense”.
According to Thiele, who is the chairman of brakes firm Knorr-Bremse, an indirect state participation via bank KfW could be an alternative to an outright government stake.
Lufthansa’s bailout has been the subject of much scrutiny due to weeks of wrangling over how much control the airline was willing to give up in exchange for vital support to survive a slump in passenger demand during the pandemic.
The deal, which will see the government buy roughly €300m worth of shares, requires Lufthansa to waive future dividends payments and place limits of executive pay.