This week Lufthansa shareholders gave their approval to the rescue package negotiated between the company and the German government with restrictions imposed by the European Union.

It has been a real rollercoaster ride with Lufthansa and their financial situation in order to secure additional backing and now it’s reported that their CFO is going to leave his post over a dispute over a cap on bonuses.

Freezing bonuses was part of the agreement with the government as to securing the funding. Senior management would ‘only’ receive their base pay for some time to come which makes it extremely unattractive for a top manager to remain.

The most important part however (for now) is that the airline has secured the go ahead from their shareholder including and especially from German businessman Heinz Herrmann Thiele who owns 15.5% of Lufthansa. Thiele who was reportedly at odds with the governments proposals and the rescue deal overall held a series of talks in the days leading up to the final vote and ultimately voted for the measure.

You can find the official announcement from Lufthansa in their investor relations portal.

Today, the shareholders of Deutsche Lufthansa AG voted in favor of accepting the capital measures and the participation of the Economic Stabilisation Fund (WSF) of the Federal Republic of Germany in Deutsche Lufthansa AG. The corresponding proposal received the necessary majority at today’s Extraordinary General Meeting of the company.

The package provides for stabilization measures and loans of up to 9 billion euros. The WSF will make silent capital contributions of up to 5.7 billion euros to the assets of Deutsche Lufthansa AG. It will also establish a 20 percent stake in the share capital of Deutsche Lufthansa AG by way of a capital increase. This capital increase was approved at today’s Extraordinary General Meeting.

The shareholders also voted in favor of granting two conversion rights for parts of the silent capital contributions. These conversion rights are intended, on the one hand, to safeguard the Federal Government in case of a takeover of Lufthansa and, on the other hand, to secure the interest payments for the silent capital contribution. Both conversion rights can be transformed into a further five percent of the company’s share capital should these conditions be met. The package will be supplemented by a loan of up to 3 billion euros with the participation of KfW and private banks. …

As a result of the resolution of the Extraordinary General Meeting, the company’s liquidity is secured on a sustained basis. The companies of Lufthansa Group are working at full speed to get their operations up and running again. The airlines’ flight schedules will therefore be consistently expanded in the coming weeks. The flight schedule for the next few weeks will be published at the beginning of next week. The plan is to include 90 percent of all originally planned short-haul destinations and 70 percent of all long-haul destinations in the flight schedule again by September.

Around 30,000 shareholders attended the Extraordinary General Meeting. A total of 39.0 percent of the share capital was represented. Of these, 98 percent of the capital present voted to accept the company’s proposed resolution. This means that far more than the necessary two-thirds majority voted in favor of adoption.

The European Commission had already approved the stabilization package before the start of the Extraordinary General Meeting.

While 9 Billion Euro are a lot of money it’s really not all that much for a company that already owes customers several billion in outstanding refunds and as per their own admission loses one Million Euro per hour each day during this period of travel restrictions.

As it stands without any signs of improvements and restarting their business would still run out of money by the end of fall, give/take a little. As such I’m not sure what they mean when saying the company’s liquidity is secured on a sustained basis while still burning money on an ongoing basis like a furnace.

Lufthansa also faces another problem and that is management. The company announced almost in the same breath that their Chief Financial Officer and member of the executive board Thorsten Dirks will leave Lufthansa.

Thorsten Dirks will withdraw from the company’s Executive Board on the occasion of the successful conclusion of the governmental stabilization measure. He was most recently responsible for the areas Digitalization and Finance. Thorsten Dirks was appointed to the Executive Board in May 2017.

Karl-Ludwig Kley, Chairman of the Supervisory Board of Deutsche Lufthansa AG, thanks Thorsten Dirks for his work on the Executive Board: “After joining the Executive Board, Thorsten Dirks initially led Eurowings through a difficult phase, while at the same time placing important accents on IT and digitalization, and most recently taking over key areas of the finance…

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