Deutsche Lufthansa AG is asking shareholders to approve a share sale worth about 2.4 billion euros ($2.6 billion) at current prices, a move that could reduce the size of any government orchestrated bailout aimed at helping the carrier survive the impact of the coronavirus.
Germany’s flagship airline is seeking to issue about 176 million new shares, equal to 36% of its existing capital, it said in an invite to the annual general meeting on May 5, to be held virtually because of the outbreak. Investors would have the option to take part in the capital increase that has the potential to generate 1.5 billion euros for Lufthansa.
A spokesman for Lufthansa investor relations said the move was routine and could have happened regardless of the Coronavirus crisis. Lufthansa sought a similar amount last year.
Like carriers worldwide, Lufthansa is looking to shore up liquidity amid a sudden drop in revenue as air-travel largely ground to a halt to contain the virus. The company is also discussing options for state aid with the governments of Germany, Austria and Switzerland, where it also owns an airline. Pressure is building for the carrier to accept partial ownership by Germany as a component of state support.
On top of the new shares, Lufthansa is seeking approval to issue a convertible bond that would translate into 47.8 million fresh shares or proceeds of about 420 million euros at the current price. Other items on the agenda include authorization to issue 10% in new shares without granting investors a subscription right, adding a similar amount potentially.
