Lufthansa secures EUR 9m bailout from Germany

Reuters has reported Lufthansa has received an EUR 9m bailout from Germany, with an agreement to give Berlin a veto in the event of a hostile bid for the airline, the news source said.

The largest German corporate rescue since the coronavirus crisis struck will see the government get a 20% stake, which could rise to 25% plus one share in the event of a takeover attempt, as it seeks to protect thousands of jobs.

Lufthansa has been locked in talks with Berlin for weeks over aid it needs to survive an expected protracted travel slump, with the airline wrangling over how much control to yield in return for financial support.

Germany´s Finance and Economy Ministries said on Monday that Lufthansa, whose shares closed up 7.5% at EUR 8.64, had been operationally healthy and profitable with good prospects, but had run into trouble because of the pandemic.

Germany is buying new shares at the nominal value of EUR 2.56 apiece for a total of about EUR 300 million.

Berlin, which has set up aN EUR 100 billion fund to take stakes in companies struck by the coronavirus crisis, said it plans to sell the Lufthansa stake by the end of 2023.

Conditions of the deal include the waiver of future dividend payments and limits on management pay, Lufthansa said, adding that the government will also fill two seats on its supervisory board, with one becoming a member of the audit committee.