Lufthansa launches $ 2.5 billion capital increase to pay off state bailout



A Lufthansa Airbus A320-200 aircraft is seen on the tarmac at Lyon-Saint-Exupéry airport in Colombier-Saugnieu near Lyon, France, March 14, 2019. REUTERS / Emmanuel Foudrot

  • The subscription period will run from September 22 to Oct. 10 5
  • Lufthansa received € 9 billion bailout in 2020
  • Blackrock Led Funds Enter Subscription Agreement

FRANKFURT, Sept. 19 (Reuters) – Lufthansa (LHAG.DE) announced on Sunday that it would launch a capital increase that is expected to raise 2.14 billion euros ($ 2.51 billion) to repay part of the plan. rescue of the first German airline received during the coronavirus crisis.

The subscription period for the highly anticipated rights issue, involving the issuance of around 597.7 million new shares, would run from September 22 to October 5, Lufthansa said.

The airline will use the net proceeds to repay part of the $ 9 billion government bailout it received last year to stay afloat throughout the COVID pandemic, which has led the Fund to economic stabilization (FSE) to take a stake in the group.

“We have always made it clear that we will only keep the stabilization package for as long as is necessary,” said Managing Director Carsten Spohr.

“We are therefore proud to be able to keep our promise and repay the measures faster than expected. We can now fully focus on the further transformation of the Lufthansa Group, ”he said.

Lufthansa said based on its operational performance in July and August, it expected to post positive adjusted earnings before interest and taxes in the third quarter.

Insiders told Reuters this year that Lufthansa is planning a capital increase of around € 3 billion, but Spohr said the decline in pension liabilities has reduced the need for new capital in recent months.

A number of funds managed by Blackrock (BLK.N) have entered into a subscription contract for a total amount of 300 million euros as part of the capital increase and have undertaken to fully exercise their rights. subscription, Lufthansa said.

If it participates in the rights issue, the ESF has undertaken to sell its current 15.94% stake in Lufthansa no earlier than six months after the completion of the sale of the shares, when it will be sold. no later than two years later, Lufthansa said.

“We also remain committed to further explore portfolio metrics when full value can be achieved to maximize the value and strategic flexibility of the group,” said Lufthansa CFO Remco Steenbergen.

($ 1 = 0.8529 euros)

Reporting by Christoph Steitz; Editing by Edmund Blair

Our standards: Thomson Reuters Trust Principles.


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