At today's meeting of the Economic Stabilisation Fund Committee (Wirtschaftsstabilisierungsfonds-Ausschuss – WSF-Ausschuss), the Federal Government adopted a comprehensive financial support package for Lufthansa. The company was in good health and making profits before the coronavirus pandemic and has good prospects for the future. The current crisis caused by the coronavirus, however, has put the company in financial distress. The German government's stabilisation package seeks to meet both the company's needs as well as the needs of taxpayers and employees of the Lufthansa Group and their legitimate interests in maintaining a strong company.
The stabilisation package includes the following measures:
- A total of €9 billion to finance stabilisation measures; of which
- €3 billion will be provided through KfW syndicate financing and €600 million by private banks;
- The Economic Stabilisation Fund (German abbreviation: WSF) acquires a Silent Partnership I to the amount of approx. €4.7 billion, which can be recognised as equity under IFRS;
- The WSF also acquires a 20% stake in Lufthansa with limited voting rights for approximately €0.3 billion by way of a capital increase.
- A further Silent Participation II of around €1 billion, which can be converted into shares (at least a further 5 per cent) under certain conditions (takeover/non-payment of the coupon by DLH);
- The Federal Government will be represented on Lufthansa’s Supervisory Board through two mandates to be exercised by independent experts.
Lufthansa commits itself to pursuing sustainability goals including the renewal of its fleet. Extensive restrictions on the remuneration of the Group Executive Board, the executive boards of Group companies and management are envisaged.
The Federal Government's offer of support has been submitted to Lufthansa and is now being discussed by the relevant Lufthansa bodies. Once it has been approved by Lufthansa, this support package must also be approved by the European Commission under state aid law. To this end, the Federal Government is currently engaged in intensive talks with the European Commission.
The WSF-Ausschuss was established on the basis of the Economic Stabilisation Fund Act. The fund serves to stabilise companies for which any threat to survival would have a significant impact on the economy or the labour market. The WSF-Ausschuss includes representatives from the following ministries: the Federal Ministry of Finance, the Federal Ministry for Economic Affairs and Energy, the Federal Chancellery, the Federal Ministry of Transport, the Federal Ministry of Labour and the Federal Ministry of Justice.