German government to bail Lufthansa out of bankruptcy with nearly $10 billion state aid – Business Insider – Business Insider

The company will take the money but the state won't get a say: this is a concise summary of what Lufthansa's Executive Board, headed by CEO Carsten Spohr, has been telling German politicians in the past few weeks.

According to an investigation by Business Insider, Lufthansa is now so up to its neck in water, the airline's management had to come to an agreement with the German state on the afternoon of Monday, April 27, after hours of negotiations.

The agreement entails the state using $10 billion to bail out Germany's last remaining international airline.

But the state should not be given a say in corporate policy, insiders say.

It's expected that one or two supervisory board mandates will be given to the German federal government.

The company could face insolvency within weeks. Reuters

However, as a result of the worldwide travel restrictions in the Corona crisis, Lufthansa is currently making losses of around $1 million every hour.

The company could face insolvency within weeks.

Founded in 1953, Lufthansa began flight operations two years later and was, until 1963, entirely in state hands.

The federal government, however, sold its shares in the mid-1990s, so Lufthansa has been fully privatized since 1997.

Spohr wants to formally seal the deal with Merkel and Germany's finance minister, Olaf Scholz on Tuesday, April 28. Getty

According to the investigation, the state is pumping just under $10 billion into the badly hit company.

In return, the government, as the new shareholder, will receive a blocking minority and one or two supervisory board seats, but these will not be filled by civil servants or politicians.

Formally, the company will then be associated with the Federal Ministry of Finance as a state holding.

According to the group, a rough agreement has been reached.

The most crucial factor in the agreement was that the appointment of civil servants or politicians to the supervisory board was unacceptable in the eyes of Lufthansa's executives.

The state is pumping just under $10 billion into the badly hit company. Larry Downing/Reuters

Spohr himself didn't officially take part in yesterday's talks but on Tuesday, he wants to formally seal the deal with Chancellor Angela Merkel and Germany's finance minister, Olaf Scholz.

Through the investigation, Business Insider learned that it's unlikely the matter will be negotiated again.

Spohr had recently proposed an Airbus model for Lufthansa. Germany, France, and Spain hold a quarter of the shares of the aircraft manufacturer but don't exercise any direct influence over the company.

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German government to bail Lufthansa out of bankruptcy with nearly $10 billion state aid - Business Insider - Business Insider