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Wednesday, February 1, 2023

The final calculation of the Lufthansa rescue


FRANKFURT – At the start of the pandemic, Lufthansa was losing a million euros per hour. The state jumped on the side of Lufthansa with credit lines and silent participations. Lufthansa filed its own shares as collateral. This bailout deal was not without risk to the taxpayer – but it was worth it.

Two good years after the spectacular rescue of Lufthansa, the German state sold the last shares of the airline group. The Federal Economic Stabilization Fund (FSM) made a profit of 760 million euros.

Part of the shares went to the logistics entrepreneur Klaus-Michael Kühne, who, as the largest individual shareholder of the MDax Group, increased his stake to 17.5%. Lufthansa boss Carsten Spohr thanked the federal government and taxpayers again on Wednesday for their support in the company’s worst crisis.

The Federal Finance Agency announced on Tuesday evening in Frankfurt that the Federal Government had terminated the stake in Lufthansa which had been built up during the Corona crisis. At €1.07 billion, the total proceeds from the block of shares far exceeded the invested amount of €306 million.

In June 2020, the WSF came into possession of a good 20% of all Lufthansa shares via a capital increase and only had to pay the nominal value of 2.56 euros per share. Most of the profit made now is due to the difference to the significantly higher share price of around 6 euros currently.

According to Lufthansa, it also paid 92 million euros in interest for loans and silent participations from the German state. These have already been returned in full by November 2021.

Silent participations I and II, from which Lufthansa had sometimes taken 2.5 billion euros, bore interest of around 4.0%. In addition, Lufthansa paid out a coupon of 19 million euros in 2021.

“Lufthansa is again in private hands,” Spohr said. With the premature end of the state intervention, which should have lasted until October 2023, the company is completely returning to normal.

Since the repayment of silent participations in November 2021, bonuses can once again be paid to managers and, in future, dividends to owners as well. The takeover of foreign airlines is also possible again, although Lufthansa has recently fallen behind in the race for Alitalia’s Italian successor, ITA.

What is new, however, is the growing influence of shareholder Kühne. Although he has announced in interviews that he wants to stay out of operational activity, according to information from the “Handelsblatt”, he is aiming for at least a seat on the supervisory board. Kühne’s confidant Karl Gernandt is planned, who is to enter the control committee by the next general meeting on May 9, 2023 at the latest. The Hamburg billionaire’s Swiss company Kühne Holding AG declined to comment.

During the state participation, which has now ended, Lufthansa had appointed two supervisory boards, which were to take into account the interests of the WSF. They were the boss of the port of Hamburg, Angela Titzrath, and the former boss of Munich airport, Michael Kerkloh. According to the company, both are duly appointed and do not have to automatically resign.

Lufthansa sells silverware

The company is leaving state care with a higher level of debt as costly state aid has been replaced by funds from private donors once the risk of insolvency has passed. With a partial sale of Lufthansa Technik, the group wants to earn billions for deleveraging.

##info box[42][left][300]## The Swiss aid has now been repaid – Switzerland has earned around 60 million francs in interest and costs.

Spohr had always insisted that he would rather be beholden to the capital market than to the taxpayer. State aid from Austria (210 million euros) and Belgium (287 million euros) is still open, as the company announced in its last quarterly report.

Germany, Austria, Switzerland and Belgium had seized the wings of the Lufthansa Group after air traffic collapsed following the corona pandemic. In total, they pledged nine billion euros to the group, with the lion’s share of the sum coming from Germany, the country of origin of Lufthansa.

The FSM represented six billion euros, including the block of shares, while the public bank KfW provided a loan of one billion euros. Lufthansa had not exhausted the total volume of 9.0 billion euros.

© dpa-AFX, aero.de | Illustration: Lufthansa | 09/16/2022 09:44


Source aero.de

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