Lufthansa Group is to
launch a €2.1 billion capital increase that will be used to pay back subsidies
granted by the German government during Covid and to improve its net debt
Existing shareholders will be offered the option to buy one new share for each share owned at the subscription price of €3.58, a 39 per cent discount on the theoretical ex-rights price.
The capital injection is
fully underwritten by a syndicate of 14 banks with sub-underwriting from a
number of funds and accounts under the management of investment firm BlackRock.
The group will use the
proceeds to repay a €1.5 billion tranche provided from the Economic
Stabilisation Fund (ESF) of the Federal Republic of Germany. It says it will
also repay a further €1 billion from the fund and cancel undrawn amounts from
the fund by the end of 2021. The ESF currently holds 15.94 per cent of the
group’s share capital.
Carsten Spohr, CEO of Deutsche Lufthansa AG, said:
“The stabilisation package agreed with the ESF has enabled Lufthansa to protect
the jobs of more than 100,000 employees. We have always made it clear that we
will only retain the stabilisation package for as long as it is necessary. We
are therefore proud that we can now deliver on our promise and repay the
measures faster than originally expected. We can now fully focus on the further
transformation of the Lufthansa Group.”
The group forecasts that the global rollout of
vaccines and further lifting of travel restrictions will see it report a
positive adjusted EBIT in the third quarter. It reported that capacity
offered by the group’s airlines has returned to more than half of pre-crisis
levels, with load factors exceeding 70 per cent in August.