After several negotiations with the German government, Lufthansa has finally clinched a $10 billion deal bailout. The government will also have a 20% stake in addition to two supervisory board seats.
In a press statement on Monday, Lufthansa’s spokesperson said that they have been given a “stabilization package,” under Germany’s Federal Economic Stabilization Fund, helping companies combat the losses incurred due to the global pandemic. The package includes a €3 billion credit facility spanning three years, and will be majorly managed by the state-owned development bank, KfW.
In addition to this, the government is investing a rough estimate of up to $6.2 billion into the company, in return for a 4% stake, which is speculated to increase in the coming years.
The airline group may also be required to waive future dividend payments.
The airline is all set to drop 10,000 jobs worldwide, as well as plans to shut down its carrier ‘Germanwings’ as part of rationalization of its operations.
In a press statement, the German government spokesperson said, “Before the pandemic, the company was healthy and profitable and had good prospects for the future, but it faces an existential emergency because of the current corona crisis. The federal government’s stabilization package takes into account the needs of the company as well as the needs of taxpayers and employees of the Lufthansa Group.”