Lufthansa has said the stabilization package being offered by the German government is "not secured" over fears the measure could fail to pass a shareholder vote at a general meeting next week.
The deal would see Lufthansa receive €9 billion in loans and direct funding in exchange for the German government temporarily taking a 20 percent stake in the company, which it intends to sell by the end of 2023. Lufthansa would also be required to transfer up to 24 take-off and landing slots at Frankfurt and Munich airports to a new competitor.
Lufthansa has repeatedly claimed that the stabilization package is its only option for long-term survival after it announced a €2 billion loss in the first quarter. The group is planning to make up to 22,000 employees redundant across the business as a result of the coronavirus crisis.
While both the supervisory and executive boards have accepted the terms of the deal, the company’s largest single shareholder, Heinz Hermann Thiele, who recently raised his stake to more than 15 percent, told German newspaper Frankfurter Allgemeine Zeitung he is not happy with the prospect of the government taking such a large stake and having two seats on the supervisory board. Thiele is pushing for other options to be explored.
In addition, Lufthansa said it expects attendance at its general meeting on June 25 to be below 50 percent. Under current regulations, this means the company must get a two-thirds majority vote for the deal to be accepted. With Thiele making public statements about his thoughts on the package, the company is worried the deal could fall through, which could force it to apply for bankruptcy protection.
In a statement, Lufthansa said: "The management board urgently appeals to all private and institutional shareholders to exercise their voting rights and to participate in the decision about the future of the company."
The deadline for shareholders to register their attendance is June 20.
Originally published by BTN Europe.