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Lufthansa is about to receive state aid of 9 billion euros

Air-carrier Lufthansa (Deutsche Lufthansa) confirmed on Thursday that it is in advanced talks with Germany's state-aid stabilisation fund of up to €9 billion as it tries to boost its finances amid a coronavirus pandemic, BNR reports.
If it comes to a deal, it will prompt the state's economy stabilization fund to take over a share of the German airline.

The package will include a 3bn euro loan from German state-owned bank KfW and the purchase of a package of Lufthansa shares from an economic stabilisation fund known as WSF, the carrier said.

The WSF fund will take a 20 percent stake in Deutsche Lufthansa through a future company capital increase, which will have to be approved at an extraordinary general meeting, the airline said.

"In addition, a WSF convertible bond must be agreed with the WSF fund, which can be replaced by an additional 5% plus one share also at face value in the case of a public takeover offer by a third party,” the announcement said.

The WSF Fund will only use its voting rights in exceptional circumstances as a risk of a takeover of the company, Lufthansa adds.

The airline also said two members of its supervisory board would have to be appointed in agreement with the federal government.

The carrier is seeking financial support to survive as it was forced to land most of its aircraft fleet following the introduced travel restrictions around the world as a result of the coronavirus pandemic.

"Deutsche Lufthansa continues talks with the WSF with the aim of immediately reaching a solution to ensure the company's solvency in the long term,” the announcement said.

Yesterday, German magazine Spiegel reported that the German government had agreed on the final details of a financial rescue package for Lufthansa.

Deutsche Lufthansa shares rose 5.5% after the start of exchange trading in Frankfurt.

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