Now it’s finally official. Lufthansa officially announced it yesterday evening. The Economic Stabilization Fund (the new sovereign wealth fund of Olaf Scholz) has approved the Lufthansa stabilization package. The German government also officially confirms the agreement with Lufthansa. Here are the most important key data:
The total volume of the stabilisation measures amounts to EUR 9 billion,
3 billion comprises a KfW syndicated financing in which private banks are participating with € 600 million.
The Economic Stabilisation Fund (WSF) acquires a Silent Participation in the amount of approx. € 4.7 billion, which can be recognised as equity under IFRS.
In addition, the WSF acquires a 20 percent shareholding in Lufthansa. With limited voting rights for approximately €0.3bn in the course of a capital increase.
A further Silent Participation II of around €1 billion, which can be converted into shares (at least a further 5 per cent) under certain conditions (takeover/non-payment of the coupon by DLH);
the Federal Government will be represented on the Supervisory Board by two mandates to be exercised by independent experts.
Lufthansa is committed to pursuing sustainability goals including the renewal of its fleet. Extensive restrictions on the remuneration of the Group Executive Board, the executive boards of Group companies and management are envisaged.
Lufthansa says the following, quote:
The WSF will make silent participations of up to EUR 5,7 billion in the assets of Deutsche Lufthansa AG. Of this amount, approximately 4.7 billion Euros will be classified as equity. Following the terms of the regulations of the German Commercial Code (HGB) and IFRS. In this amount the silent participation is unlimited and can be terminated by the company in whole or in part. According with the agreed concept, the remuneration for the silent participations amounts to 4% for the years 2020 and 2021. It is rising to 9.5% in 2027 in the following years.
In addition, the WSF will subscribe to shares by way of a capital increase in order to build up a 20% stake in the share capital of Deutsche Lufthansa AG. The subscription price will be 2.56 Euro per share. So that the cash contribution will amount to about 300 million Euro. The WSF may also increase its share in the share capital to 25% plus one share in the event of a takeover of the company.
In addition, in the event of non-payment of remuneration by the Company? A further portion of the silent participation can be converted into a further shareholding of 5% of the share capital at the earliest from 2024 and 2026 respectively. The second conversion option, however, only applies to the extent that the WSF has not previously increased its shareholding as part of the above-mentioned takeover. Conversion is also possible for dilution protection. However, subject to full repayment of the silent participations by the company as well as a minimum selling price of EUR 2.56 per share plus an annual interest of 12%. The WSF undertakes to sell its shareholding in full at the market price by December 31, 2023.