Profit Sheets

Lufthansa launches $2.5B capital increase to pay back part of state bailout

September 20, 2021 01:09 PM

Lufthansa launches $2.5 billion capital increase to pay back part of state bailout
Lufthansa launches $2.5B capital increase to pay back part of state bailout it expected to post positive adjusted earnings before interest.

Lufthansa launches $2.5B capital increase to pay back part of state bailout euros ($2.51 billion) to pay back part of a state bailout Germany’s top airline received during the coronavirus crisis.

The subscription period for the widely-expected rights issue, involving the issue of about 597.7 million new shares, would run from Sept. 22 to Oct. 5, Lufthansa said. “We have always made it clear that we will only retain the stabilisation package for as long as it is necessary,” Chief Executive Carsten Spohr said.

The airline will use the net proceeds to repay a chunk of the 9 billion euro government bailout it received last year to stay afloat throughout the COVID pandemic, which resulted in the Economic Stabilisation Fund (ESF) taking a stake in the group.

“We are therefore proud that we can now deliver on our promise and repay the measures faster than originally expected. We can now fully focus on the further transformation of the Lufthansa Group,” he said.

Also Read: Sensex, Nifty likely to open lower amid mixed global cues

Lufthansa said that based on its operating performance in July and August, Lufthansa launches $2.5B capital increase to pay back part of state bailout it expected to post positive adjusted earnings before interest and tax in the third quarter.

Insiders told Reuters this year that Lufthansa was planning a capital increase of roughly 3 billion euros but Spohr has said lower pension liability had reduced the need for fresh capital in the past months.

A number of funds under the management of Blackrock have entered into a sub-underwriting agreement for a total of 300 million euros as part of the capital increase and have committed to fully exercise their subscription rights, Lufthansa said.

Leave a comment

Intraday Tips
Stock Name Open Price Trend Details
Reliance 1930.10 Buy  Click Here
Asian Paints 2577.00 Buy  Click Here
HDFC 2448.00 Buy  Click Here
HDFCAMC 2790.00 Buy  Click Here
TCS 3120.00 Buy  Click Here