Shares in German flag carrier Lufthansa jumped this morning after its largest shareholder dropped his opposition to the airline’s state bailout package.
Billionaire Heinz Hermann Thiele had previously objected to the terms of the bailout, which would have seen authorities take a 20 per cent stake in the carrier.
However, with shareholders preparing the vote on the proposals in today’s virtual extraordinary general meeting, Thiele said he had dropped his opposition.
Speaking to German media, Thiele, who recently increased his stake in the airline to 15.5 per cent, said: “I will vote for the proposals”.
Given that only 38 per cent of shareholders have thus far registered to vote in today’s meeting, it was feared that Thiele would field a virtual veto over the proposals.
The proposals need two-thirds of votes to pass. In the morning’s trading shares were 11.7 per cent up after Thiele’s admission.
Thiele’s change of heart came after the billionaire businessman met with Germany’s finance minister on Monday.
If he had voted against the package, Lufthansa might have been forced to seek protection from creditors to stop it going bust.
Coronavirus has battered the aviation giant, with an unprecedented slump in passenger demand leading it to seek state aid.
Thiele had rejected the bailout terms and proposed an indirect government holding in Lufthansa through Germany’s KfW development bank rather than a direct stake and board representation.
The deal, which will see the government buy roughly €300m worth of shares, requires Lufthansa to waive future dividends payments and place limits of executive pay.