Lufthansa looks to repay German bailout with E2.1b share offer

Lufthansa is to raise more than E2.1b by offering new shares to investors, the German carrier said on Sunday, and use the proceeds to repay the multibillion-euro bailout it received from Berlin in the summer of 2020. The long-anticipated capital raising, underwritten by 14 banks and due to be completed in early October, will help the Frankfurt-based airline refund the full E2.5b it has drawn from its home country’s Economic Stabilisation Fund (ESF) by the end of the year, the group added. Germany’s ESF participated in a E9b rescue package for Lufthansa last summer, which included support from the Austrian, Swiss, Italian and Belgian governments. Berlin also spent E300m on shares in the company, and now owns almost 16% of the group. Lufthansa has repaid much of what it drew from the package, including a E1b loan from the German development bank KfW. Once the ESF tranche is fully repaid, the airline will cancel the facility in its entirety, before repaying the E1.2b it owes to the remaining governments, a spokesperson said. “We have always made it clear that we will only retain the stabilisation package for as long as it is necessary,” said CE Carsten Spohr. “We can now fully focus on the further transformation of the Lufthansa Group.” After being forced to ground almost all its planes at the height of the pandemic, the group has been slowly recovering, with flights in August reaching 50% of those flown in the same month in 2019. Lufthansa said it expected a similar percentage in September and October, as demand for international and corporate travel increases, and added it was currently flying to 85% of its pre-pandemic destinations. Its cargo business has been booming in recent months, as freight capacity in the bellies of passenger aeroplanes remains restricted amid a surge in demand for air deliveries as online shopping continues to be popular.<br/>