1 JUNE 2020
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The German Federal Government has agreed a €9bn bailout with Lufthansa as it seeks to avoid financial collapse in the wake of the Covid-19 outbreak.
The airline has been severely affected by a decline in travel during the pandemic.
Under the plans, the Economic Stabilisation Fund (WSF) will take a 20% stake in the airline, which it hopes to sell by 2023.
As part of the package, the German Government will also inject €5.7bn in non-voting capital, known as a ‘silent participation’.
Part of these funds can be converted into an additional 5% equity stake.
This would then enable the German Government to veto any potential hostile takeover bids.
As a result, six Airbus A380s and seven A340-600s, as well as five Boeing 747-400s, will be permanently withdrawn. Germanwings has permanently ceased operations
The package still requires the final approval of the management board and the supervisory board of Lufthansa and an extraordinary general meeting subject to the approval of the European Commission and any competition-related conditions.
All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum
David Starkie, London
I thought minority state shareholdings could not be used to block take-overs by other EU enterprises under EU single capital market regulations.