Sunday, September 19, 2021
Airline wants to pay off the state
Lufthansa resolves capital increase
The crane airline wants to go back to its old size: Lufthansa is raising fresh money with 2.1 billion euros. The crisis-ridden airline wants to repay corona aid from the state.
Lufthansa starts a capital increase worth billions to repay German state aid. The gross issue proceeds will amount to 2.14 billion euros, as the MDax company announced on Sunday evening in Frankfurt. The subscription price is EUR 3.58 per new share. The new papers are expected to be offered to shareholders from September 22 to October 5 at a subscription ratio of 1: 1.
Lufthansa intends to use the net proceeds to repay the silent participation I from the German Economic Stabilization Fund (WSF) in the amount of 1.5 billion euros. In addition, the intention is to repay the silent participation II in the amount of 1 billion euros in full by the end of the year and also to terminate the unused part of the silent participation I by then.
Lufthansa boss Carsten Spohr had recently emphasized that he wanted to regulate the repayment of German state aid with the current federal government. “We would like to clarify the situation with the current contact persons,” said the head of Germany’s largest airline group just under two weeks ago.
Lufthansa has already repaid a loan from the state bank KfW of one billion euros. Spohr had already announced the current capital increase for the repayment of the silent participations of the economic stabilization fund. It was not until the second quarter that Lufthansa had drawn another 1.5 billion euros from the federal government’s second silent contribution. In total, it has used state aid amounting to 4 billion euros. The money comes from Germany and the neighboring states of Belgium, Austria and Switzerland.
The repayment of all state aid is also a prerequisite for further mergers and acquisitions among Europe’s airlines. As long as companies in the industry are supported by the state, they are prohibited from merging. Even before the Corona crisis, it was clear that there would be further consolidation, said Spohr. The crisis practically pressed the pause button in this process. “The moment this government stabilization is paid back, this pause button will switch back to play,” said the manager. “Because we have way too many airlines in Europe.”
Because of the corona pandemic and the associated travel restrictions, airlines around the world had lost most of their business in the past year. Many escaped bankruptcy only thanks to billions in government aid.