Lufthansa raises funds, paving way to end of German state support

Frankfurt (dpa) – German airline Lufthansa, which was propped up with billions in German taxpayers’ money during the coronavirus crisis, has successfully raised funds on the open market, preparing the way for the German state to end its support.

A gross amount of 2.2 billion euros (2.5 billion dollars) was raised in the capital increase announced on September 19, the airline announced in Frankfurt on Wednesday. According to earlier statements by the airline, Lufthansa intends to use the money to repay German state aid.

The German state still holds some 14 per cent of Deutsche Lufthansa AG via the Economic Stabilisation Fund (WSF) after the capital increase.

Lufthansa is strengthening its equity base through the capital increase and will use proceeds from it to repay part of the WSF subsidy, the fund said in a statement: “The participation of the WSF in the capital increase serves the goal of a speedy termination of the government stabilization measures.”

Germany, Austria, Switzerland and Belgium came to the rescue of the Lufthansa Group – which also owns the airlines Austrian, Swiss and Brussels – with billions of euros in financial aid after the collapse of air travel during the coronavirus pandemic.

Together, the four countries pledged a total of 9 billion euros to the group, the lion’s share of which came from Germany. Neighbouring countries provided loans to strengthen the group’s subsidiaries.

The German state initially took a 20-per-cent stake in Lufthansa through the WSF. In addition, the WSF provided put two other pots of capital on standby.

The WSF has already reduced its shareholding by selling shares on the stock exchange. At the time the capital increase was announced, the fund still owned just under 16 per cent of the group’s share capital, according to Lufthansa.