The German government approved the stabilization package for Lufthansa. The package provides for stabilization measures and loans of up to EUR 9 billion.
The government will make silent participations of up to 5.7 billion euros in total in the assets of Deutsche Lufthansa AG.
Of this amount, approximately EUR 4.7 billion is classified as equity. In this amount, the silent participation is unlimited in time and can be terminated by the company on a quarterly basis in whole or in part.
In accordance with the agreed concept, the remuneration on the silent participations is 4% for the years 2020 and 2021, and rises in the following years to 9.5% in 2027.
Furthermore, the government will subscribe to shares by way of a capital increase in order to build up a 20% stake in the share capital of Deutsche Lufthansa AG. The subscription price will be 2.56 Euro per share, so that the cash contribution will amount to about 300 million Euro. The government may also increase its stake to 25% plus one share in the event of a takeover of the company.
In addition, in the event of non-payment of remuneration by Lufthansa, a further portion of the silent participation is to be convertible into a further shareholding of 5% of the share capital at the earliest from 2024 and 2026 respectively.
The second conversion option, however, only applies to the extent that the government has not previously increased its shareholding in connection with the above-mentioned takeover case. Conversion should also be possible for dilution protection.
Subject to the full repayment of the silent participations by the company and a minimum sale price of EUR 2.56 per share plus an annual interest of 12%, the government undertakes, however, to sell its shareholding in full at the market price by 31 December 2023.
The stabilization measures are supplemented by a syndicated credit facility of up to EUR 3 billion with the participation of KfW and private banks with a term of three years. This facility is still subject to the approval of relevant bodies.
