What stake will Berlin take in the struggling airline?

Question

Accepted Answer

Berlin May Acquire Up To 25 Per Cent Stake in Lufthansa

The German government, through its Economic Stabilisation Fund (WSF), is in discussions to acquire a 20 per cent stake in Lufthansa. Additionally, the WSF would secure a convertible bond equivalent to a further five per cent plus one share. This bond is structured to allow Berlin to gain a blocking minority in the event of a third-party takeover offer.
Government Stake in Lufthansa

Under the proposed rescue package, the WSF would acquire a 20 per cent equity stake in the airline group. This significant holding would mark the first time the German government has held a share in Lufthansa since 1997, signifying a substantial state intervention in the formerly state-owned carrier.
Convertible Bond for Enhanced Control

In addition to the direct equity stake, the WSF would also purchase a convertible bond. This bond represents an additional five per cent plus one share of Lufthansa. Crucially, this bond can be converted in the scenario of a public takeover bid by another entity, thereby empowering Berlin with a blocking minority to prevent unwanted acquisitions.
Conditions and Influence

The envisaged state involvement aims to provide Lufthansa with up to €9 billion in stabilisation measures. Beyond the financial stake, the agreement includes conditions such as the waiver of future dividend payments and restrictions on management remuneration. Furthermore, two state-appointed representatives are expected to join Lufthansa's supervisory board, allowing Berlin to exert influence on potential job cuts or environmental targets.

Reading history

Hide →

This history is cleared when the page is closed.

What stake will Berlin take in the struggling airline?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends