Lufthansa has warned that its €9bn bailout from the German government is at risk, after its biggest shareholder indicated he might reject the deal in a vote later this month.
Heinz Hermann Thiele, one of Germany’s richest men, who owns more than 15 per cent of the airline, told the Frankfurter Allgemeine Zeitung that while he did not want to block the rescue package, he wanted to determine what other solutions were available to Lufthansa before being forced to vote it through.
The Frankfurt-based carrier responded on Wednesday, saying: “In view of the latest public statements by the company’s largest single shareholder . . . the board considers it possible that the stabilisation package could fail to achieve the two-thirds majority of votes cast that would be required in this case.”
It added in the statement that if the rescue package failed to be approved at an extraordinary meeting on June 25, Lufthansa would probably be forced to begin insolvency proceedings.
The German group, which has been burning through €1m of cash reserves each hour as the Covid-19 crisis forced it to ground most of its aircraft, reached an agreement with Angela Merkel’s government last month.
As part of the €9bn bailout, Berlin would take a 20 per cent stake in the airline almost 25 years after it was first privatised, which can be increased to prevent a hostile takeover.
As a result of the state investment, existing shareholders would have their stock diluted if they voted through the package. In compliance with requests from the European Commission, Lufthansa would also surrender lucrative slots at its hubs in Munich and Frankfurt as part of the deal.
Mr Thiele, the billionaire chairman of brakes maker Knorr-Bremse, first revealed his stake in Lufthansa in early March, when it crossed the 5 per cent threshold at which public disclosure was required.
After confirming that he had substantially increased his investment, Mr Thiele told the FAZ that he was “disturbed by the apodictic statement that there are no other, consensus-based solutions” available to Lufthansa.
As not all investors participate in such meetings, Mr Thiele could have a blocking minority when the bailout is put to a vote.
The German carrier said on Monday that it would be left with 22,000 excess staff as it becomes a permanently smaller group as a result of the Covid-19 crisis.
“According to our current assumptions about the course of business over the next three years, we have no perspective of employing one in seven pilots and one in six flight attendants as well as numerous ground staff at Lufthansa alone,” said HR board member Michael Niggemann.
Lufthansa, which includes the Brussels, Austrian and Eurowings airlines, is also seeking state-aid in Belgium and Austria.
The group’s Switzerland-based airlines, Swiss and Edelweis, have already secured an aid package worth €1.4bn, which can only be used by those two brands.