Because a capital increase will take off in Lufthansa

Because a capital increase will take off in Lufthansa

Lufthansa has asked the shareholders (including the state) for authorization to increase the capital of up to 5.5 billion euros to repay public funding. All the details

Lufthansa warms up its engines for a new capital increase. The board of directors of the German airline, on the occasion of the general meeting held on May 4, 2021, asked for the green light for a capital increase of up to 5.5 billion euros.

Target? Reimburse public aid that arrived at the height of the pandemic. All the details.

THE NEW CAPITAL INCREASE

Lufthansa is aiming for a new capital increase. The board of directors asked the shareholders, gathered for the 68th general meeting , to approve a capital increase of 5.5 billion euros.

This is the way, explains CEO Carsten Spohr, to "return to financial stability", allowing all shareholders, including the German state, with 20%, to contribute.

OBJECTIVE: REFUND PUBLIC AID

The “majority” of the proceeds from the issue of new shares, of which neither the final amount nor the date has been decided, says the CEO, will be used to “repay” public aid. In practice, under current market conditions, the company aims to find better conditions than those currently envisaged by state aid.

THE COMPANY'S INTENTIONS

The request is hardly a surprise. Lufthansa had already announced the need to create “new authorized capital C pursuant to §7b WStBG up to 5.5 billion euros with a duration of five years. The authorization allows Lufthansa AG to flexibly use funding opportunities to raise shares on the capital market, ” wrote the company explaining the items on the meeting's agenda.

And it's no surprise that the money can also be used to replace a so-called silent stake that is part of the German government's € 9 billion bailout of Lufthansa. "The amount of the Authorized Capital C is a technicality, derived from the amount of the Silent Shareholdings I and II of the Economic Stabilization Fund, as a potential capital increase of the Authorized Capital C would be directly linked to the repayment of the stabilization measures", wrote the German carrier.

THE INTERVENTION OF THE STATE

In the midst of the pandemic crisis, Lufthansa obtained 9 billion euros in state aid from the German government, in exchange for a 20% state stake and the sale of 24 slots at the main airports (Frankfurt and Munich) to ensure competition. Due to this aid, the German company cannot make company purchases.

THE RENEWAL OF THE FLEET

Meanwhile, Lufthansa is also thinking about the renewal of the air fleet. The company, according to what has been ratified by the supervisory board, will purchase five Airbus A350 aircraft and five Boeing 787 “Dreamliners”.

The planes will replace older aircraft that consume more fuel, explains the daily Frankfurter Allgemeine Zeitung. The first "Dreamliners" should debut in the skies as early as next winter, while the others by mid-2022.

The A350s, on the other hand, will not be delivered to the company before 2027 and 2028


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-in-lufthansa-decollera-un-aumento-di-capitale/ on Wed, 05 May 2021 04:18:52 +0000.