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Lufthansa shares soar after major shareholder backs bailout plan
[BERLIN] Lufthansa shares jumped by 10 per cent on Thursday after investor Heinz Hermann Thiele dropped his objections to a 9 billion euro (S$14.07 billion) government bailout to rescue the carrier hit hard by the coronavirus pandemic.
"I will vote for the proposal," Mr Thiele, who recently increased his stake in Lufthansa to 15.5 per cent, told the Frankfurter Allgemeine daily on Wednesday.
His endorsement amounts to an 11th-hour respite for the airline after fears had swirled that he might veto the proposed rescue package, which will see the German state acquire a 20 per cent stake and board seats, diluting existing shareholdings.
Shareholders are due to vote on the bailout at Lufthansa's virtual extraordinary general meeting on Thursday. Thiele had been expected to have a virtual veto at the meeting as only 38 per cent of shareholders have registered to vote.
Germany's flagship airline has been brought to its knees by Covid-19 and what promises to be a protracted travel slump, and has sought a state rescue to avoid insolvency.
Billionaire Thiele had objected to the bailout terms and proposed an indirect government holding in Lufthansa via Germany's KfW development bank rather than a direct stake and board representation.
Mr Thiele's criticism had sparked fears the bailout would fail and Lufthansa would have to seek protection from creditors within days.
Mr Thiele's change of heart came after he held talks with the government on Monday.
Finance Minister Olaf Scholz, who has refused to countenance changes to the complex deal, said on Monday he believed shareholders would take into account the fact that the deal was carefully negotiated with the European Union.