Lufthansa nears rescue, making Germany its top shareholder

Lufthansa is close to a multibillion euro bailout deal that would see the state become its biggest shareholder after the coronavirus punctured a decades-long boom in air travel. The shares gained as much as 8.3% Thursday after Europe’s largest carrier confirmed it’s in advanced talks with Germany’s WSF Economic Stabilization Fund for as much as E9b in aid. The package would include a E3b loan, a so-called silent participation and a 20% direct stake through the sale of new shares, Lufthansa said. The government would also receive a convertible bond equivalent to 5% plus one share. Under German law, the 25% plus one share total stake would enable the state to block motions at annual general meetings, giving it a veto over hostile takeover attempts. “A decision can be expected shortly,” German Chancellor Angela Merkel said late Wednesday in Berlin, adding that “intensive talks” were ongoing with the company and the European Commission, which would need to approve a deal. Under the plan, Germany would also receive two seats on Lufthansa’s supervisory board. The company didn’t say whether these would be political or independent figures, a matter under discussion in negotiations.<br/>