- "We have succeeded! We will survive," said the chairman of the German company, Karl-Ludwig Kley, after the meeting ended.
- The European Commission said it had agreed to pump the German government’s €6 billion in funds to keep Lufthansa steadfast in the face of challenges.
- Der Spiegel recently said that Lufthansa was negotiating a financial rescue package worth €10 billion ($10.98 billion).
Lufthansa shareholders, at a general assembly meeting Thursday, agreed to a €9 billion rescue plan for the company. The plan was supported by 98% of the shareholder capital that cast a vote during the online meeting, and was the result of weeks of tough negotiations.
The result of the vote remained vague for a long time, due to reservations of a major shareholder in the company who did not want the German state to obtain at least 20 percent of Lufthansa shares under the plan. This has been a precedent since it was fully privatized in 1997.
“We have succeeded! We will survive,” said the chairman of the German company, Karl-Ludwig Kley, after the meeting ended. Kley had previously warned, “we have run out of money.” He told participants, “we are living from the reserves we set aside” in good years. “Without support, a bankruptcy looms in the next few days.”
In parallel, the European Commission said it had agreed to pump the German government’s €6 billion in funds to keep Lufthansa steadfast in the face of challenges. However, it imposed strict conditions.
The company should make room for competitors at Frankfurt and Munich airports to ensure fair competition. The Commission also placed restrictions on any acquisitions of Lufthansa competitors, and prohibited them from obtaining dividends until government assistance is received.
The massive rescue package also includes €3 billion of public loan guarantees, and will see Berlin acquire 20 percent of the airline’s giant shares and two seats on the board.
German Minister of Economy Peter Altmaier welcomed the approval of the rescue plan, and said it was “good news for more than one hundred thousand employees.” Altmaier said that Lufthansa had the opportunity “to confront the most serious crisis in its history.”
He emphasized that the company would remain independent in light of the government’s share being a minority stake, but the deal allows for the prevention of forced acquisitions. The German Finance Minister said that the state’s intervention will be for a limited period, and that it will sell its stake as soon as the company regains its recovery. He hopes that this will bring it back to profit.
The weekly newspaper “Der Spiegel” recently said that Lufthansa was negotiating a financial rescue package worth €10 billion ($10.98 billion). According to the newspaper, the government’s demands, in return, were direct participation in the group of 25.1%, in addition to guaranteed profits of 9%.
Of the total amount, the newspaper added, it will be €5.5 billion, in the form of non-voting capital, from which the government will want a return of nine percent. The remaining €3.5 billion will be in the form of loans that the state-owned German Development Bank will provide to the group, adding that Belgium, Austria, and Switzerland may be contributing to the rescue.
Lufthansa’s president, Carsten Spohr, had previously warned of a great influence of the state on his company if the company obtained government aid loans to counter the consequences of the Coronavirus pandemic. “If the company is to succeed in the future, it will have to be able to continue to determine its fate organizationally,” Spohr said.
He explained that it is very difficult to manage a group if several governments want to influence its operational business tasks. Mr. Spohr offered the option of declaring the company bankruptcy under self-management rather than direct participation of the state in the group.