Lufthansa German seeks to repay German bailout with a ১ 2.1 billion share offer

Deutsche Lufthansa AG Update

Lufthansa is set to raise more than ১ 2.1 billion by issuing new shares to investors, the German carrier said on Sunday, and will use the proceeds to repay the multi-billion-euro bailout received from Berlin in the summer of 2020.

The Frankfurt-based airline will help repay the drawn 5.5 billion drawn from its home country’s Economic Stability Fund (ESF) due to the long-awaited fundraising under 1 banks and the completion in early October. Years, groups added.

Germany’s ESF took part in a b9bn rescue package for Lufthansa last summer, backed by the Austrian, Swiss, Italian and Belgian governments. Berlin has spent € 300 million on shares of the company, and now owns about 16 percent of the group.

Lufthansa has repaid everything it received from the package, including a b 1bn loan from the German Development Bank KFW.

Once the ESF discipline is fully paid, the airline will cancel the facility in full before paying a € 1.2bn repay to the remaining government.

“We have always made it clear that we will hold on to the stability package for as long as needed,” said CEO Carsten Spohr. “We can now fully focus on further transformation of the Lufthansa group.”

After being forced to ground almost all aircraft at the height of the epidemic, the group is slowly recovering, with flights in August reaching 50 percent of the aircraft flying in the same month in 2019.

Lufthansa said it expects a similar percentage in September and October, as demand for international and corporate travel increases, adding that it is currently flying at 85 percent of its pre-epidemic destination.

Its cargo business has grown in recent months, as the demand for airlines has increased due to the popularity of online shopping, which has limited the cargo capacity of passenger aircraft.

While it still burns about m 200 million a month in cash, Lufthansa says it has no operating cash drain in the third quarter and will burst positive for the first time before earnings, taxes, devaluation and measurement before interest.

The group, which aims to return to gross profit in 20224, expects to supply up to 300 new aircraft a year in the future.

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