German Government agrees on a rescue package for Lufthansa
The German government has agreed on the final details of a rescue package for Lufthansa, German magazine Der Spiegel reported on Wednesday.
Lufthansa is seeking to tap Germany’s economic stabilisation fund to help it weather the coronavirus pandemic and an expected travel slump. The German federal government has agreed on how the state should help Lufthansa. According to Der Spiegel, Federal Minister of Finance Olaf Scholz, Federal Minister of Economics Peter Altmaier and Chancellor Angela Merkel reached a compromise today.
The agreement should stipulate that the federal government will take a 25 percent stake in the airline (according to Handelsblatt, it is a 20% stake and a convertible bond that could be converted in an additional 5% stake plus one share to get a blocking minority only in case of a third party takeover bid) and provide it with additional capital of up to nine billion euros. Accordingly, two seats on the supervisory boards are to be filled by the federal government with business specialists and not politicians.
A dispute in the grand coalition had broken out in recent weeks over the state’s entry. Federal Transport Minister Andreas Scheuer and Bavaria’s Prime Minister Markus Söder only wanted a silent participation in Lufthansa without seats on the supervisory board, whereas Finance minister Scholz pushed for greater participation in order to influence staff issues or ecological requirements.
A federal representative is on the way from Berlin to Frankfurt to close the deal with the airline. According to the government, an agreement with Lufthansa should be reached as soon as possible. The state’s entry would have to be approved by the shareholders at an extraordinary general meeting. A spokeswoman for the federal government emphasised to Der Spiegel that the negotiations have not yet been completed.
