German airline soars after top shareholder backs bailout
Lufthansa shares jumped as much as 20% on Thursday after its top shareholder dropped his objections to a 9 billion euro ($10 billion) government bailout for the German airline brought to the brink of collapse by the coronavirus pandemic.
“I will vote for the proposal,” billionaire investor Heinz Hermann Thiele, who recently increased his stake in Lufthansa to 15.5%, told the Frankfurter Allgemeine daily on Wednesday.
EU REGULATORS APPROVED LUFTHANSA’S BAILOUT DEAL
His endorsement amounts to an 11th-hour reprieve for Germany’s flagship airline after fears had swirled he might veto the proposed rescue, which will see the government take a 20% stake and board seats, diluting existing shareholdings.
Shareholders are due to vote on the plan later on Thursday at a meeting held online due to the pandemic.
Thiele’s backing will come as a relief to Chancellor Angela Merkel, who could ill afford another high-profile business collapse following the failure of payments firm Wirecard.
It has been brought to its knees by coronavirus and what promises to be a protracted travel slump, and like many rivals across the world, sought state help to stay afloat. Even after Thursday’s gains, its shares are down almost 40% this year.
Also on Thursday, European Union regulators approved Lufthansa’s bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid.