Lufthansa Shares Soar Amid Closing $9.7 Billion Govt Bailout Deal

Published May 21st, 2020 - 12:30 GMT
Lufthansa Shares Soar Amid Closing $9.7 Billion Govt Bailout Deal
Lufthansa is facing the biggest financial crisis in its history due to the coronavirus pandemic, which has grounded around 90 per cent of its planes. It is currently losing about 800 million euros per month. (Shutterstock)
A 9-billion-euro (9.7-billion-dollar) bailout agreement between embattled airline Lufthansa and the German government is close to fruition, Chancellor Angela Merkel said late on Wednesday without giving further details.
 
Sources told dpa on condition of anonymity that the agreement would see the government take a stake of less than 25 per cent and receive two seats on Lufthansa's supervisory board. The government would not have veto power regarding the company's decisions, the sources said.

A government spokesperson said the negotiations were at an advanced stage, but had not been completed.

The online trading platform Tradegate showed Lufthansa shares 4.5 per cent up shortly after German news magazine Der Spiegel reported that the bailout package had been agreed.

Lufthansa is facing the biggest financial crisis in its history due to the coronavirus pandemic, which has grounded around 90 per cent of its planes. It is currently losing about 800 million euros per month.

Many at Lufthansa had resisted suggestions that the German state should take a stake in the firm, with some pushing for a more limited government role.

In a letter to employees, Lufthansa chief executive Carsten Spohr said that a deal was close to being reached.

"Since our liquidity will continue to decrease in the foreseeable future, we hope that political decision-making will be concluded quickly and that a future-oriented compromise will be reached in Berlin that also takes into account our competitiveness in the future," the letter read.


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