The management of the German group is afraid that too few shareholders will attend the extraordinary general meeting. This could cause the rescue deal for Lufthansa to fail.
It is probably the horror scenario for almost all those involved: the agreement negotiated over many weeks between the German government and Lufthansa’s management on the nature and extent of state aid is rejected by the shareholders. The group would then have to file for insolvency.
It could come to that. This is because Lufthansa’s management fears that less than 50 per cent of those with voting rights will be attending the Extraordinary General Meeting on June, 25th, as it stated in a press release on Wednesday (June, 17). And this increases the requirement for the approval rate at which the package must be accepted. Two thirds of the shareholders present would then have to say yes.
Thiele would lose a lot of money
The management feared that this would not be achieved. Major shareholder and billionaire Heinz-Hermann Thiele declared in an interview with the Frankfurter Allgemeine Zeitung that he now owns 15 percent of the shares. He is also critical of the rescue package that has been presented. The billionaire is mainly bothered by the fact that the state is taking over a 20 percent share of the group.
It’s no surprise. For Thiele would lose a lot of money as a result of the planned capital increase. His investment in Lufthansa shares would be massively devalued. He believes that there are «other solutions that can be agreed upon,» as he told the paper.
Urgent appeal to shareholders
In Lufthansa’s scenario, in which less than 50 percent of the shareholders participate in the Annual General Meeting and Thiele owns 15 percent, the goal of a two-thirds majority is hardly attainable. For this reason, «it may be necessary to apply for a protective shielding procedure under insolvency law shortly before the Annual General Meeting if no other solution is found immediately,» the Group stated in the announced.
Besides Thiele, the other two major shareholders are the investment funds Lansdowne Partners International and Blackrock. The rest of the shares are held by many smaller investors. She wants to mobilize Lufthansa with the message. If more than 50 percent of the votes are present at the shareholders’ meeting, the required approval rate falls to a simple majority. The Management Board therefore makes an urgent appeal to «all private and institutional shareholders to exercise their voting rights and to participate in the decision on the future of the company».