Deutsche Lufthansa AG announced on Monday that their stabilization package has been approved by the Economic Stabilization Fund (WSF) of the Federal Republic of Germany. The package is worth up to €9 billion, including €4.7 billion in equity.
Lufthansa announced today that the Group’s stabilization package has been approved by the Federal Republic of Germany’s Economic Stabilization Fund (WSF). The WSF will make silent participation of up to €5.7 billion in Lufthansa assets, with approximately €4.7 billion classified as equity under the German Commercial Code (HGB) and IFRS. The stabilization measures also include a syndicated credit facility of up to €3 billion with the participation of the KfW and private banks with a term of three years, bringing the value of the total package to approximately €9 billion. The government’s remuneration for silent participation will be 4 percent in 2020 and 2021, which will increase to 9.5 percent by 2027.
The WSF will also subscribe to shares via a capital increase a share capital stake of up to 20 percent in Deutsche Lufthansa AG at a share price €2.56, a total cash contribution valued at around €300 million. In the event of a potential takeover of the company or non-payment of remuneration by the Company, the WSF may increase their share stake to 25 percent plus one share. The WSF intends to sell its shares at the market price by December 31, 2023, subject to full repayment of the silent participation by the company and a minimum sale price of €2.56, plus an annual interest of 12 percent.
Conditions of the stabilization package include a waiver of dividend payments and limits on management compensation. Additionally, the WSF will hold two seats on the company’s Supervisory Board, one of which will be on the Audit Committee. Other than in the event of a company takeover, the WSF will not exercise voting rights at the Annual General Meeting. The final stabilization package must receive approval from the company’s Management and Supervisory Boards and remains subject to approval of the European Commission and competition-related regulations.
Source: Deutsche Lufthansa AG