Lufthansa looks to repay German bailout with €2.1bn share offer

Deutsche Lufthansa AG updates

Lufthansa is to boost greater than €2.1bn by providing new shares to traders, the German service mentioned on Sunday, and use the proceeds to repay the multibillion-euro bailout it obtained from Berlin in the summertime of 2020.

The long-anticipated capital raising, underwritten by 14 banks and attributable to be accomplished in early October, will assist the Frankfurt-based airline refund the total €2.5bn it has drawn from its dwelling nation’s Financial Stabilisation Fund (ESF) by the top of the 12 months, the group added.

Germany’s ESF participated in a €9bn rescue package for Lufthansa final summer time, which included assist from the Austrian, Swiss, Italian and Belgian governments. Berlin additionally spent €300m on shares within the firm, and now owns virtually 16 per cent of the group.

Lufthansa has repaid a lot of what it drew from the bundle, together with a €1bn mortgage from the German growth financial institution KfW.

As soon as the ESF tranche is totally repaid, the airline will cancel the power in its entirety, earlier than repaying the €1.2bn it owes to the remaining governments, a spokesperson mentioned.

“We’ve got at all times made it clear that we are going to solely retain the stabilisation bundle for so long as it’s needed,” mentioned chief government Carsten Spohr. “We will now totally give attention to the additional transformation of the Lufthansa Group.”

After being pressured to ground almost all its planes on the top of the pandemic, the group has been slowly recovering, with flights in August reaching 50 per cent of these flown in the identical month in 2019.

Lufthansa mentioned it anticipated the same proportion in September and October, as demand for worldwide and company journey will increase, and added it was at the moment flying to 85 per cent of its pre-pandemic locations.

Its cargo enterprise has been booming in latest months, as freight capability within the bellies of passenger aeroplanes stays restricted amid a surge in demand for air deliveries as on-line buying continues to be widespread.

Whereas it’s nonetheless burning by roughly €200m a month in money, Lufthansa mentioned it anticipated to haven’t any working money drain within the third quarter, and for earnings earlier than curiosity, taxes, depreciation and amortisation to show constructive for the primary time because the pandemic broke out.

The group, which is aiming to return to total profitability in 2024, additionally expects to take supply of as much as 30 new plane per 12 months sooner or later.

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