Lufthansa launches $2.5b capital increase to repay state bailout

Lufthansa said it would launch a capital increase that was expected to raise 2.14 billion euros ($2.51 billion) to pay back part of a state bailout Germany’s top airline received during the coronavirus crisis.

The subscription period for the widely-expected rights issue, involving the issue of about 597.7 million new shares, would run from Sept. 22 to Oct. 5, Lufthansa said.

The airline will use the net proceeds to repay a chunk of the 9 billion euro government bailout it received last year to stay afloat throughout the COVID pandemic, which resulted in the Economic Stabilisation Fund (ESF) taking a stake in the group.

“We have always made it clear that we will only retain the stabilisation package for as long as it is necessary,” Chief Executive Carsten Spohr said.