Germany will allocate 9 billion euros to help Lufthansa

27-05-2020

Germany has decided to provide Lufthansa with state aid. The size of the payment is 9 billion euros. In exchange, WSF receives ⅕ of the airline, the process will take place through the issuance of shares of the carrier. If any other company will try to get control over Lufthansa, the airline may increase its stake to a quarter plus one share, a blocking stake.

The government will allocate about 300 million euros to buy back shares. The value of one share will be 2.56 euros. In addition, the airline will receive a loan of up to three billion euros with a repayment period of three years.

The aid package granted must be approved by the members of the supervisory board of the airline and the members of the European Commission. This is a prerequisite.

It is important to understand that owning a 20% stake in Lufthansa does not give the state the right to hamper or veto key decisions for the airline. According to German Chancellor Angela Merkel, the government is actively involved in negotiations.

Despite the airline’s problems, its shares gained 7.5% on Monday.

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