Lufthansa shareholders have signed off on a rescue package at an extraordinary general meeting held Friday, estimated to be worth some €9 billion.
The move – which will see Berlin acquire a 20 per cent stake in the airline – received overwhelming support from the meeting, with 98.04 per cent in support.
Chairman Karl-Ludwig Kley chaired the virtual meeting, pleading to participants for a much-needed cash injection.
“We have run out of money,” said Kley. “We are living from the reserves we set aside in good years.”
Today, the shareholders of Deutsche Lufthansa AG voted in favor of accepting the capital measures and the participation of the Economic Stabilisation Fund (WSF) of the Federal Republic of Germany in Deutsche Lufthansa AG. More information: https://t.co/ggesT7KeXv pic.twitter.com/aJesUkFRsY
— Lufthansa News (@lufthansaNews) June 25, 2020
“Without support, bankruptcy looms in the next few days.”
CEO Carsten Spohr has previously also spoken to the airline’s cash burn rate, which he cited as €1 million per hour in April. At Friday’s meeting, he said that the government plans to dispose of its stake once the airline is stabilised – though it could also raise it to block outside takeovers.
“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,” he said.
”We at Lufthansa are aware of our responsibility to pay back the up to €9 billion to the taxpayers as quickly as possible.”
The funding will take the form of up to €5.7 billion in silent capital contributions provided by Germany’s coronavirus stabilisation fund (WSF), supplemented by loans of up to €3 billion with the participation of KfW and private banks.
The company adds a decision on the approval of the stabilisation measures in the other home markets of Lufthansa Group carriers will be made ”in the near future”.