Aviation
SHARES in German flagship airline Lufthansa on Monday fell by almost nine percent in opening trading as plans to save the ailing company from insolvency were questionable by investors critical of a government bailout.
The share dropped to 9.28 euros (or 10.40 dollars) before recovering somewhat on Lufthansa’s first day of trading on the MDAX stock exchange, a lower league.
This was after the airline dropped out of Germany’s blue-chip DAX list of 30 major players.
Heavy losses, linked to the coronavirus pandemic’s catastrophic impact on air travel, had led to the demotion.
Lufthansa is in dire need of a 9 billion euros bailout package agreed with the government and cleared by EU regulators.
The final hurdle is shareholders’ approval, with an extraordinary general assembly set for Thursday.
However, there were concerns that the planned cash injection could be scuppered if too few shareholders attend the meeting.
On Sunday, its Chief Executive, Carsten Spohr, said shareholders registered for the meeting comprised less than 38 percent of capital.
“If the shareholder presence represents less than 50 percent of capital, a two-thirds majority was needed in the vote.
“This could be a tall order given that the company’s single largest shareholder, Heinz Hermann Thiele, has not committed to approving the deal and recently criticised the state aid ” Spohr said.
Earlier, FAZ business daily, Thiele, was against the government’s intervention, stating his firm conviction that the state was not the best entrepreneur.
Finance Minister Olaf Scholz, however, defended the bailout plan.
“We had a very good discussion with the Lufthansa management and developed a very good plan, which also found agreement in Brussels. The plan is well considered,” he said. (dpa/NAN)
– Jun. 22, 2020 @ 12:35 GMT |
Tags: Lufthansa shares slide further as concerns grow over bailout
