Lufthansa in talks to sell 20% of maintenance arm Technik – sources

Lufthansa is holding talks with buyout funds as it seeks to sell about 20% of its aircraft maintenance business Technik, three sources familiar with the matter said. The German airline has abandoned plans to list a minority stake in the business given stock market volatility after Russia's invasion of Ukraine, the sources said, speaking on condition of anonymity. Citigroup and JPMorgan are advising on the stake sale which could value Technik, one of the biggest global players in aircraft repair, at E5–8b including debt, two of the sources said. Private equity firms are working to prepare bids for a 20% stake ahead of an auction process which is expected to kick off later this year, one of the sources said. Lufthansa is seeking a long-term investor and would only pursue a stock market listing of Technik at a later stage, this source said. The decision comes days after Air France-KLM said it had entered talks with private equity firm Apollo Global Management for a E500m injection into a repair unit as airlines reshape balance sheets post-pandemic. In June 2020, the EC approved German plans to contribute E6b to the recapitalisation of Lufthansa's parent company Deutsche Lufthansa. Global airlines are facing competition from standalone maintenance firms in Asia and elsewhere, and increasingly from airplane manufacturers themselves, in the expanding market for overhaul and other services.<br/>