Lufthansa stabilization package

Deutsche Lufthansa AG agreed stabilization measures with the Economic Stabilization Fund (ESF) of the Federal Republic of Germany and the governments in Belgium, Austria and Switzerland in June 2020 to mitigate the consequences of the corona pandemic and maintain the solvency of the company.

The negotiated stabilization package includes stabilization measures and loans of up to EUR 9 billion.

The ESF makes silent participations of up to 5.7 billion euros in total in the assets of Deutsche Lufthansa AG. Of this amount, approximately EUR 4.7 billion is classified as equity in accordance with the provisions of the German Commercial Code (HGB) and IFRS. In this amount, the silent participation is unlimited in time and can be terminated by the company on a quarterly basis in whole or in part.

Furthermore, the ESF subscribes to shares by way of a capital increase in order to build up a 20% stake in the share capital of Deutsche Lufthansa AG. The ESF may increase its stake to 25% plus one share in the event of a takeover of the company.

In addition, in the event of non-payment of remuneration by the company, a further portion of the silent participation is to be convertible into a further shareholding of 5% of the share capital at the earliest from 2024 and 2026 respectively.

The stabilization measures are supplemented by a syndicated credit facility from the KfW of EUR 1 billion with a term of three years as well as state guarantees for loans from Switzerland, Austria and Belgium amounting to EUR 2 billion.

The conditions relate to the waiver of future dividend payments and restrictions on management remuneration. In addition, two seats on the Supervisory Board will be filled in agreement with the German government, one of which will be a member of the Audit Committee. Except in the event of a takeover, the ESF undertakes not to exercise its voting rights at the Annual General Meeting in connection with the usual resolutions of ordinary Annual General Meetings.

After approval by the Executive Board and the Supervisory Board, the shareholders of the company voted in favor of accepting the capital measures and the participation of the Economic Stabilisation Fund of the Federal Republic of Germany in Deutsche Lufthansa AG at an Extraordinary General Meeting on 25 June 2020. The stabilization package was approved by the European Commission.

Details of the stabilization measures can be found in the ESF-Framework Agreement and the Investor Presentation. In its declaration, the Executive Board of Deutsche Lufthansa AG undertakes to comply with the agreed terms and conditions.