German Finance Minister says “It’s our duty to help Lufthansa”
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German Finance Minister Olaf Scholz said on Monday he thought consensus could be achieved on Lufthansa as a showdown between its biggest shareholder and the German government looms over the terms of a 9 billion euro ($10.09 billion) bailout.
“We have had a very good discussion and we developed a very good proposal together with the Lufthansa management and the council and we also agreed with the European Union so I think discussing about the proposal, which is what we do – just making clear what it is about – could organise the consensus,” Scholz said via videolink at the Frankfurt Finance Summit.
“Because it’s really a very well-thought idea about how to deal with the very special situation. I think Lufthansa has been a very successful company before the crisis so it’s our duty to make feasible that they will survive the situation of the Covid-19 pandemic,” he added, speaking English.
Lufthansa is seeking to avoid a grounding and insolvency, Chief Executive Carsten Spohr said on Sunday, before a showdown between the airline’s biggest shareholder and the German government over the terms of a 9-billion-euro bailout.
Lufthansa has been hard hit by what is expected to be a protracted travel slump because of the COVID-19 pandemic, forcing it to seek a bailout.
Billionaire shareholder Heinz Hermann Thiele will meet the economics minister on Monday to discuss his objections to the state-backed bailout, a source close to the matter told Reuters.
As an alternative to the government taking a direct stake in Lufthansa, Thiele has proposed an indirect participation through state-owned German development bank KfW.
In a letter to employees, Spohr said the airline was in intense talks with the government and large shareholders which had “the clear goal of finding a satisfactory solution for our company and all participants before Thursday,” when an extraordinary shareholder meeting will be held.
Expressing his desire to avoid a grounding or insolvency, he said: “I am sure this is an objective which unites all parties.”
Lufthansa warned last week that a failure to secure shareholder approval for the bailout could force it to apply for protection from creditors under German insolvency law.
The bailout requires the support of more than two thirds of shareholders. Thiele, who has 15.5% of Lufthansa’s shares, objects to the German state taking a 20% stake and seats on its supervisory board.
Spohr said shareholders representing 38% of the company’s capital had registered for the shareholder vote, handing Thiele an effective veto if he does not endorse the proposed deal.
Lufthansa will pay June salaries on Monday, Spohr said in the letter.
