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Lufthansa gets strong investor backing for 2.1 billion euro cash call By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO – Lufthansa aircraft are seen on Frankfurt Airport’s tarmac, Germany June 25, 2020. REUTERS/Kai Pfaffenbach

LONDON/FRANKFURT – Strong investor backing was given by Lufthansa to issue rights for 2.14 billion Euro ($2.47 Billion). It is encouraging for other travel businesses looking for ways to weather the COVID-19 crises.

According to the company, 98.36% of investors had subscribed for its rights-issue and it will place the rest in the open markets shortly.

This cash will be used for repayment of a portion of the 9.3 billion euro ($10.38 trillion) bailout the government provided last year in order to keep the company afloat during the COVID pandemic. The Economic Stabilisation Fund (ESF), took a share in the group.

Lufthansa is just one of many airlines or travel businesses that has raised funds, or plans to do so in order to make it through the most difficult period for this sector in 20 years.

Britain’s easyJet recently closed a £12 billion rights issue. TUI plans to launch a €1.13 billion rights issue within the next few weeks. Air France, however, seems to be considering other options.

Lufthansa’s solid agreement will be a positive encouragement to the rest.

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