Thursday, 25 June 2020

Lufthansa's top shareholder now backs bailout deal

“I will vote for the proposal,” came the massive u-turn from Lufthansa's top shareholder on Wednesday, sending the carriers share price soaring by 20% at one stage. 

Billionaire investor Heinz Hermann Thiele has dropped his objections to conditions attached to the  €9 billion bailout of the German airline group by the federal government.  Speaking to the Frankfurter Allgemeine Thiele, who owns 15.5% of Lufthansa, said “I will vote for the proposal,” which must have been a huge relief not only to the airline's top management, its legions of staff whose livelihoods were hanging in the balance but also to the German authorities and Angela Merkel who can't really afford another high-profile business collapse after the Wirecard fiasco.

Thiele had objected to the government's requirement for a 20% stake in the company and two seats on the board in return for the massive bailout the keep the airline flying in the wake of the coronavirus COVID-19 pandemic. 


Special talks between Thiele and the government at the start of the week had given him food for thought and whilst not all his doubts had been allayed, he told the media that he couldn't vote for insolvency. Thiele said he would seek to influence the company’s future development. 

Shareholders are due to vote on the plan later today at a special virtual meeting, also on Thursday, European Union regulators approved Lufthansa’s bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid.

Carsten Spohr, the airline's Chief Executive confirmed the government had no plans to become involved in the carrier's operations, “Everyone is aware that we are in a global competition. We need the tools to compete against American or Chinese airlines,”

The airline is also currently in deep negotiations with unions over an inevitable restructuring that, according to some commentators, will see the carrier shed some 23,000 positions. Spohr had previously said he had hoped to avoid job losses by introducing reductions to working time and salaries for all workers.  





Recommended for you...




No comments: