The German government will sell part of the 20% stake it owns in Lufthansa (LHAB) (LHA), after the airline reported positive progress in recovering from the effects of the pandemic.
The government’s economic stabilization fund (ESF) will sell up to a quarter of its current holding, equivalent to a 5% stake in the airline, over the coming weeks, the German finance agency announced on August 16, 2021.
“After the measures introduced by Lufthansa (LHAB) (LHA) started to take effect, the ESF is adjusting its holding, keeping in mind the interests of both sides,” the agency commented, adding the sale would be dependent on market conditions.
Lufthansa (LHAB) (LHA) received a bailout of €6 billion ($7.1 billion) from the ESF last year as it struggled with the near total collapse of air travel as a result of the Coronavirus pandemic. Of that amount, the government spent €300 million on acquiring its 20% stake. The carrier has also sought financial assistance from other European governments, where its subsidiaries are based.
Lufthansa (LHAB) (LHA) reported improving second quarter results on August 5, 2021. It narrowed losses in the second quarter, driven by a travel rebound and buoyant cargo demand and also said it was hopeful for business travel in the second half of the year.
Measures to cut more than €3.5 billion in costs by 2024, which includes reducing its fleet and job losses, were progressing faster than expected, it noted at the time.
The carrier’s chief financial officer also confirmed Lufthansa (LHAB) (LHA) was preparing a capital increase in order to repay government loans, possibly by the time of the German federal elections in late September.