The rescue package will give the government 20% ownership in the group, which is owned by airlines from Germany, Austria, Switzerland and Belgium, and two seats under its supervision.
The government is injecting € 5.6 billion (২ 6.2 billion) into the airlines, which will generate returns starting at 4% this year and before increasing next year. The package includes a three-year credit facility of ৩ 1 billion (বছরের 6.3 billion), most of which will come from Germany’s state-owned development bank, KFW.
Also, the government will earn ২০ 2.56 ($ 2.79) per share or about 300 300 million (7 327 million) per share in Lufthansa. The government has the option to increase its stakeholder to 25% plus one share, enabling it to prevent any potential takeover. It has agreed to sell its shares in full by 2023, pay full investment of 6.2 billion and sell the shares well above the purchase price. Lufthansa stock, which has nearly halved this year, closed at .6 8.64 ($ 9.41) in Frankfurt on Monday.
The government said in a statement that “before the epidemic the company was healthy and profitable and had good prospects for the future, but due to the current corona crisis it has faced an existential emergency,” the government said in a statement. “The federal government’s stable package takes into account the needs of the company and the needs of Lufthansa Group taxpayers and employees.”
Two seats on the Lufthansa oversight board must be filled by agreement with the German state, the agency said, one of which is to be a member of the audit committee. The government said the seats would be allocated to “independent experts”, who said the financial aid measure would lead to “extensive remuneration restrictions” for senior management.
The airline group will also have to waive future dividend payments.
“Lufthansa is committed to achieving sustainable goals, including renewing its fleet,” the government said without elaborating on the environmental conditions surrounding the bailout.
Lufthansa said its management and supervisory boards would “meet soon” to make rescue decisions. Package, subject to shareholder and regulator approval.
– Mark Thompson contributed to reporting.