Shareholders back German government bailout to rescue Lufthansa
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Lufthansa shareholders have overwhelmingly backed a €9bn (£8.1bn) bailout by the German government in a last-ditch rescue bid for Europe’s largest airline group, as the coronavirus crisis continues to batter the travel sector.
More than 98 per cent of shareholders voted in favour of the rescue package in a virtual extraordinary general meeting today, chairman Carsten Spohr said in a statement.
The cash injection means the German state will take a 20 per cent stake in the group, bringing it back on board for the first time since its privatisation in 1997.
Spohr added : “The decision of our shareholders provides Lufthansa with a perspective for a successful future. On behalf of our 138,000 employees, I would like to thank the German federal government and the governments of our other home countries for their willingness to stabilise us.
“We at Lufthansa are aware of our responsibility to pay back the up to €9bn to the taxpayers as quickly as possible.”
Around 30,000 shareholders attended the extraordinary general meeting today, meaning around 39 per cent of the company’s share capital was represented.
The group’s biggest shareholder, German rail industry tycoon Heinz Hermann Thiele, sent shares soaring this morning as he voiced his support of the bailout hours ahead of the crunch vote.
The billionaire investor had previously objected to the terms of the bailout, but his sharp U-turn sent shares flying 10 per cent higher. If he had voted against the package, Lufthansa might have been forced to seek protection from creditors to stop it going bust.
European Union regulators also approved Lufthansa’s €6bn recapitalisation earlier today, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid.
Dozens of Lufthansa employees rallied at Frankfurt airport during the shareholder meeting, carrying signs that said “Lift us up where we belong, vote yes!”and “We are Lufthansa, we are family”, AFP reported.
It comes as the coronavirus crisis has hammered the aviation giant, with an unprecedented slump in passenger demand during the pandemic forcing it to seek state aid.
Germany’s flagship airline has seen shares dive around 40 per cent since the beginning of the year.
The company had already secured an aid package worth €1.4bn from the Swiss government, which can only be used for its airlines based in the country.