Lufthansa repays €1.5bn of Germany’s “silent stake”

Lufthansa (LH, Frankfurt Int’l) has completed a EUR2.162 billion euro (USD2.5 billion) capital increase announced last month, using EUR1.5 billion (USD1.73 billion) of it to repay a chunk of the German government’s remaining bailout package. The move has eliminated the “Silent Participation I” funding – limited to providing capital – handed to it last year via Germany’s Economic Stabilisation Fund (ESF).

The repayment was made “significantly earlier than originally planned,” Lufthansa said in a statement on October 11, adding that it aims to repay the remaining EUR1 billion (USD1.16 billion) Silent Participation II by the end of 2021. In early February, it repaid “ahead of schedule” another part of the bailout, a loan of EUR1 billion provided through the state-owned development bank KfW.

Although the ESF, which currently holds 14.09% of the airline’s share capital, has committed to not selling any shares in the six months following the completion of the capital increase, it will sell the stake within 24 months as long as the silent participations are repaid.

As previously reported, CEO Carsten Spohr intends to free Lufthansa from government attachments before Chancellor Angela Merkel leaves office, as what is likely to be months of post-election coalition talks could lead to Finance Minister Olaf Scholz and his Social Democratic Party of Germany taking power. The party has hinted it would like the state to hold on to its stake for longer.

“We are very grateful that Deutsche Lufthansa AG was stabilised with tax money in the most challenging of times. This has made it possible to preserve more than 100,000 jobs and secure them for the future,” Spohr said in the statement.

“We are increasingly confident about the future,” he added. “More and more countries are opening their borders and demand for air travel, especially from business travellers, is growing daily. Nevertheless, the environment for airlines remains challenging. That is why we are consistent in continuing our transformation.”

About Lufthansa
Type Scheduled Carrier
Base Frankfurt Int’l
Aircraft 271
Destinations 248
Routes 438
Daily Flights 946