Lufthansa puts bailout to vote in make-or-break shareholders’ meeting

By Rachel More and Ella Joyner, dpa

The fate of Germany’s ailing Lufthansa airline will be decided on Thursday at an extraordinary shareholders’ meeting, in which a 9-billion-euro (10-billion-dollar) government bailout will be put to a vote.

Lufthansa has spiralled into crisis as a result of the catastrophic impact of the coronavirus pandemic on air travel.

The deal, which Lufthansa has said is necessary in order to save the company from insolvency, would require the German government taking a 20-per-cent share in the company.

Valued at around 300 million euros, that stake is only a small part of the total package – but it has irked investors, who will see their own shares diluted as a result of the state intervention. Meanwhile, the government is set to pay 2.56 euros per share, around a quarter of the current stock market price.

The outcome of the online meeting largely comes down to one man, Lufthansa’s biggest shareholder, Heinz Hermann Thiele.

He had been critical of the deal, but in an interview with the Frankfurter Allgemeine Zeitung on Wednesday he said he had decided to vote in favour of it.

Shareholder presence at the online meeting is expected to represent less than 50 per cent of capital. This means a two-thirds majority is needed in the vote – which would have been a tall order without Thiele’s backing. He holds a 15.5 per cent stake.

The bailout was negotiated between Lufthansa, the Berlin government and the European Commission.

The commission, which acts as the EU’s antitrust watchdog, gave its official approval to the multi-billion-dollar deal on Thursday.

The EU executive has, however, attached strings to the deal to limit the distortion of competition. Lufthansa will have to give up some of its take-off and landing slots at busy Frankfurt and Munich airports, where it is a dominant player.

“This gives competing carriers the chance to enter those markets,” EU Competition Commisioner Margrethe Vestager said in a press release.

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