Lufthansa seeking 9 billion euro bailout

FILE PHOTO: Planes of German carrier Lufthansa are parked on a closed runway at the airport in Frankfurt, Germany, March 23, 2020, as the spread of the coronavirus disease (COVID-19) continues. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) – Lufthansa (LHAG.DE) on Thursday said it is negotiating a 9 billion euro ($9.71 billion) “stabilisation package” with Germany’s Federal Economic Stabilization Fund, confirming an earlier Reuters report.

The bailout includes a non-voting capital component, known as a so-called silent participation, a secured loan, and a capital increase which may leave the German government with a shareholding of up to 25% plus one share, the company said.

“The Executive Board of Deutsche Lufthansa AG is continuing negotiations with the aim of ensuring the future viability of the company for the benefit of its customers and employees,” the company said in a regulatory statement.

Various alternatives of a capital increase are being discussed, including an increase at the nominal value of the share, if necessary after a capital cut, Lufthansa added.

As a condition of the bailout, Lufthansa may have to waive future dividend payments and provide supervisory board representation for members of Germany’s stabilisation fund, the company said.

Last month Reuters reported that the airline group was seeking a 9 billion euro rescue package after travel bans grounded 700 of its aircraft, leading to a 99% drop in passenger numbers.

Reporting by Edward Taylor; Editing by Arno Schuetze, Madeline Chambers

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