Lufthansa shareholders bow to the inevitable

A complex set of agreements hashed out over a six-hour, virtual shareholders meeting finally broke down resistance from some Lufthansa stake holders to a €9bn bailout. The agreement will see Germany take a 20 percent stake of the company in newly issued shares, giving it a bigger voice in the company that the objector-in-chief, Heimn Hermann Thiele, who owned 'just' 15.5 percent. The cash injection includes a 3-year syndicated credit facility of up to €3bn thanks to the participation of KfW, a German state bank, and private banks. Karl-Ludwig Kley, chairman of the supervisory board, admitted the airline didn't have much of a choice. "We simply don't have any money," he said, revealing that the company had been living on dwindling reserves that had been built up over years. "Soon most of it will be gone, and insolvency is looming." Unsurprisingly, shareholders were annoyed that their own shares were being devalued and demanded to know why Lufthansa couldn't raise more money on the capital markets. In the end, it wasn't just that Germany's famous airline was out of money. It was out of time.