Lufthansa repays € 1.5 billion in state aid after appeal for funds
- First tranche of hybrid capital repaid
- Payment for the 2nd installment before the end of the year
- Government bailout totaled 9 billion euros
FRANKFURT, Oct. 11 (Reuters) – Deutsche Lufthansa (LHAG.DE) announced on Monday that it had concluded a capital increase of 2.16 billion euros ($ 2.5 billion) and used the proceeds to repay 1.5 billion euros in state aid as it expects a rebound in air travel.
The German airline has repaid the first of two installments of hybrid capital, called the silent stake, which it received as part of a 2020 bailout, it said.
The company added that it also intends to repay the second tranche, amounting to € 1 billion, in full before the end of this year.
“Today we are keeping our promise and repaying a large part of the stabilization funds sooner than expected. We are increasingly confident about the future,” said Managing Director Carsten Spohr.
He added that the demand for flights, especially from business travelers, was increasing daily, although the market remained difficult.
The airline is also aiming to end an unused portion of the first tranche of stake before the end of 2021. A state loan of € 1 billion was repaid in February.
Lufthansa said last week that its rights issue was 98.36% underwritten by investors and the rest were quickly sold on the open market. Read more
Last year, the airline received a € 9 billion government bailout to stay afloat during the COVID-19 pandemic, which led the German state’s Economic Stabilization Fund (ESF) to take 15% of the shares of Lufthansa.
This participation was reduced to 14.09% in the capital increase.
Lufthansa said on Monday that the ESF had committed not to sell any shares for the next six months, but would sell them completely within 24 months of the capital increase, provided the airline repays both. participation brackets, among other contractual requirements.
Reporting by Ludwig Burger Editing by Mark Potter
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