Lufthansa Agrees on A Rescue Package
The traditional German group Lufthansa claims to be bankrupt because of Covid 19. The company is now announcing that it will “promptly” agree with the federal government on a rescue package.
Deutsche Lufthansa, which came under pressure in the corona crisis, is about to reach an agreement with the federal government on a multi-billion dollar rescue package. In a mandatory announcement, the company confirmed at night that it was holding “advanced talks” with representatives of the Economic Stabilization Fund (WSF) about a stabilization plan to ensure the airline’s survival. You want to “get a deal” in a timely manner to ensure the solvency of the traditional group.
Chancellor Angela Merkel said before the report was published that after weeks of negotiations, the government was on the verge of reaching an agreement with the airline. The government is in negotiation talks with the company and the EU Commission.
According to the group, the rescue package, which has not yet been finally agreed, provides for stabilization measures amounting to up to nine billion euros, three billion of which as KfW loans. In addition, the WSF will make a silent contribution. According to Lufthansa, the capital increase will be decided at an extraordinary general meeting. In addition, there is a direct government stake of 20 percent and a convertible bond worth five percent plus one share.
The WSF intends to exercise the voting rights associated with the shares only in exceptional cases, such as protection against a takeover. In addition, two seats on the Supervisory Board are to be filled in coordination with the federal government, the airline said. The state’s participation is subject to conditions, according to the airline’s report – such as a waiver of future dividend payments and restrictions on management remuneration.
Without government funding, Lufthansa claims to be bankrupt. The board of directors and the supervisory board of Lufthansa still have to agree to the stabilization package and the state rescue package must then be approved by the European Commission.
Lufthansa Agree on A Rescue Package - /10
The traditional German group Lufthansa claims to be bankrupt because of Covid 19. The company is now announcing that it will "promptly" agree with the federal government on a rescue package.