Lufthansa agreed to a 10 10 billion bailout with the German government

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.

Lufthansa (DLAKY) Germany said in a statement on Monday that the Federal Economic Stability Fund, which is being used to help affected organizations Coronavirus is worldwide, Approved the “stabilization package”, which is supported by the company’s executive board.

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.”

Lufthansa, which lost 1.2 billion ((1.3 billion) in the first quarter, has not expected to recover from the global aviation epidemic for several years. The company is shutting down its discounted career, German, And plans to create 10,000 jobs.

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.

French state-backed loans amounted to € 7 billion (.6 7.6 billion) Air France-KLM (AFLYY) Included last month New promise To cut absolute carbon emissions by half in 2024 on its domestic network compared to 2019.

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.

About the author: Dale Freeman

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