Germany’s Lufthansa seeks to gain support for bailout deal

Lufthansa had agreed to the bailout plan that would give Germany’s stabilization fund a 20% stake. Existing shareholders need to approve the rescue package at an extraordinary meeting on June 25.



German airline Lufthansa warned that its 9 billion euro ($10.1 billion) bailout deal could be in peril after its leading shareholder indicated he might vote against the state-backed bailout at an extraordinary general meeting later this month.

Its statement came after German investor Heinz Hermann Thiele criticized the rescue package, saying he had raised his stake in the company to more than 15% and hoped alternative options could be explored.

Lufthansa-CEO-Carsten Spohr-Andreas Bartels-bailout-deal

Annual press conference 2020 at the Lufthansa Aviation Center: Carsten Spohr (Chairman and CEO) and Andreas Bartels (Director and Head of Media Relations) @Photographer: Fabian Kieper.

“In view of the latest public statements by the company’s largest single shareholder, Heinz Hermann Thiele, the board considers it possible that the stabilization package could fail to achieve the two-thirds majority of votes cast that would be required in this case,” Lufthansa said. “This would mean that Deutsche Lufthansa AG would possibly have to apply for protective shield proceedings under insolvency law a few days after the annual general meeting if no other solution is found immediately,” the German airline said.

Lufthansa had agreed to the bailout plan that would give the government’s stabilization fund a 20 percent stake. Existing shareholders need to approve the plan at an extraordinary meeting on June 25.

Under German protective shield proceedings, a company’s management remains in charge and gets up to three months to come up with a plan to avoid insolvency.

The Frankfurt-based company said it “urgently appeals” to all shareholders to exercise their voting rights. Only a simple majority is required if more than 50 percent of the share capital is present.

Lufthansa said it expects attendance of 50% at the extraordinary meeting. The company sees a possibility that the rescue package may fail to win the majority that such low attendance would require.

Avatar
Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Goldman Sachs invests $69 million in fintech Starling

Goldman Sachs invests $69 million in fintech Starling

Goldman Sachs Growth Equity has invested £50 million ($69 million) in UK digital bank, Starling. The investment is in addition to the bank’s oversubscribed £272 million Ser
15 mins ago
Apple to launch hybrid TV set-top with speaker

Apple to launch hybrid TV set-top with speaker

Apple is bolstering its smart home devices space with the introduction of a new hybrid device— a combination of an Apple TV and a smart speaker with a screen, according to news r
5 hours ago
Leading Japanese automaker Toyota previews the future of EV – the bZ4x

Leading Japanese automaker Toyota previews the future of EV – the bZ4x

One of the most trusted pioneers of technology in the automotive sector, Toyota Motor Corp. has finally revealed the future of the EV segment by showcasing its new SUV, encompassin
5 hours ago
Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes-Benz has unveiled a battery-powered luxury car as part of the brand’s flagship S-Class saloon, designed to compete with Tesla. The 2022 Mercedes-Benz EQS is set to relea
3 days ago
Major US banks report surge in profits for the quarter

Major US banks report surge in profits for the quarter

Three major US banks —JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc.—reported earnings results for the first quarter of 2021.
3 days ago
Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin price has once again soared over $63,000 USD as the cryptocurrency market braces for the upcoming Coinbase IPO. The San Francisco-based cryptocurrency exchange platform, wh
3 days ago