Lufthansa shares have been registered shares since September 1997. That is the only way in which proof can be provided at any time that German investors hold the majority of Lufthansa shares as required by aviation conventions and EU directives.
Registration means that Lufthansa must approve the sale or purchase of shares. Lufthansa may only refuse permission, however, if failure to do so might jeopardise its air traffic rights. As long as the percentage of foreign shareholders falls sufficiently short of 50 per cent, Lufthansa will not intervene in share trading. Lufthansa is required by law to publish its shareholder structure by nationality every three months.
Lufthansa shareholders’ register
Depositary banks send trading data to the Lufthansa shareholders’ register electronically via Deutsche Börse AG’s securities trading system, CASCADE RS. They relay the name, address, nationality and the number of shares traded. The banks also notify the shareholders’ register electronically of changes of address.
Note: If the shareholder is a minor, an official guardian or trustee must be entered in the shareholders’ register under the proxy address. Some banks charge the portfolio holder fees for these statutory transactions.
Effects on the Annual General Meeting
Lufthansa itself, and not the depositary banks, sends out invitations to the Annual General Meeting along with the agenda. It does so on the basis of the entries in the shareholders’ register. That is why we recommend our shareholders to make sure, if they change their address or shareholding, that their depositary bank makes the appropriate changes in the shareholders’ register in good time.
The Aviation Compliance Documentation Act (LuftNaSiG) requires listed German airlines to fulfil certain requirements in respect of their ownership and control status to maintain their air traffic rights.
By the terms of EU Regulation No. 2407/92 an airline must, to maintain and acquire an air traffic operating licence, be owned directly or via a majority shareholding by EU member-states or their nationals and be controlled by them at all times. Aviation agreements concluded by the Federal Republic of Germany with non-EU states require proof that the majority of the airline’s share capital is in German hands for it to exercise air traffic rights.
To ensure that the operating licence remains valid in accordance with EU Regulation No. 2407/92 and that air traffic rights continue to be in force in accordance with the relevant aviation agreements, the airline in question must be in a position to prove its ownership and control status. This is ensured by means of registered shares. Possible measures to prevent excessive foreign control range from share buybacks and issuing new shares against cash to requiring foreign shareholders to sell their shares.