Lufthansa Group has secured approval
from the federal German government’s economic stabilization fund, WSF, for a €9
billion financial package.
Under the agreement the WSF will
contribute up to €5.7 billion to Lufthansa’s assets including €4.7 billion in
equity.
The measure will be supplemented by a
syndicated three-year credit facility of up to €3 billion, provided by private
banks and KfW – yet to be approved.
It says the “silent participation” is
unlimited in time and can be terminated by the company – either in whole or in
part – on a quarterly basis.
The remuneration will amount to 4% for
2020 and 2021, increasing gradually to 9.5% by 2027.
WSF will acquire shares to build up a
20% shareholding in Lufthansa Group at a price of €2.56 per share – equating to
an overall cash investment of some €300 million.
It will be able to increase the
shareholding further, to just over 25%, if there is a takeover of the company.
If Lufthansa Group fails to remunerate
the fund then an additional portion of the WSF participation can be converted
into another 5% shareholding from 2024 and 2026 – although the second
conversion only becomes valid if the shareholding increase from a takeover has
not been exercised.
Subject to Lufthansa’s fully repaying
the participations and a minimum sale price of €2.56 per share, plus annual
interest of 12%, the WSF is undertaking to sell its entire shareholding at the
market price by 31 December 2023.
Lufthansa Group says the stabilization
package still requires the final approval of its management board and
supervisory board, while the measures are also subject to shareholders’ and
regulatory approval.
By David Kaminski-Morrow
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