All in all the stabilisation measures for Lufthansa are worth nine billion euros. Agreement was reached on Monday in the Committee of the Economic Stabilisation Fund. The package takes into account the needs of the company, while not losing sight of the interests of the tax-payer and of the Lufthansa Group’s workforce, which is dependent on Lufthansa remaining strong.
The deal includes the following:
- Syndicate financing from the state-owned development bank KfW totals 3 billion euros, with private banks putting up 600 million euros.
- The Economic Stabilisation Fund will acquire about 4.7 billion euros in non-voting capital which is known as a silent participation.
- In addition, the Economic Stabilisation Fund will acquire a 20% share in Lufthansa as part of a capital increase. The value of this is about 300 million euros. It will be linked to voting rights on certain issues.
- A second silent participation worth about 1 billion euros can be converted into an additional equity stake (of at least 5%) under certain circumstances (to protect the airline against a hostile take-over or if the airline misses coupon payments).
The emergency relief package of the German government still needs to be approved by the European Commission. Federal Minister for Economic Affairs Peter Altmaier explained that it is absolutely essential that Lufthansa continue to operate in Germany. This is something worth fighting and working for, he said.