Lufthansa shelves planned stake sale in maintenance division

Deutsche Lufthansa AG shelved a planned sale of a minority stake in its maintenance and repair subsidiary, the world’s biggest business of its kind that had attracted interest from several private-equity bidders. The German carrier said that instead of selling a part of Lufthansa Technik, the company will implement its growth plans “independently,” according to a stock-exchange filing. The company said it’s seeing opportunities particularly from the increasing number of engines that are coming in for maintenance. “In view of the ongoing manufacturer problems — especially with engines — the strategic value of our Lufthansa Technik as an integral part of the Lufthansa Group has again increased significantly in recent months,” Lufthansa Technik said in a separate release. Lufthansa had considered selling as much as 20% of Technik, valuing the entire subsidiary at about E8b, people familiar with the talks said. The plan to retain the asset is a surprise reversal for Europe’s largest airline group, which has been selling assets while seeking to expand its airline operation with a bid for Italy’s ITA Airways, formerly Alitalia. A sale “could have helped unlock hidden value within the group,” said Neil Glynn, an analyst aviation research firm Air Control Tower. “However, it may also have injected additional governance complexity.”<br/>