Lufthansa (LHAG.DE) shares jumped around 15% on Thursday after its top shareholder dropped his objections to a 9 billion euro ($10 billion) government bailout for the German airline brought to the brink of collapse by the COVID-19 pandemic.
“I will vote for the proposal,” billionaire investor Heinz Hermann Thiele, who recently increased his stake in Lufthansa to 15.5%, told the Frankfurter Allgemeine daily on Wednesday.
His endorsement amounts to an 11th-hour reprieve for Germany’s flagship airline after fears had swirled he might veto the proposed rescue, which will see the government take a 20% stake and board seats, diluting existing shareholdings.
Shareholders are due to vote on the plan later on Thursday at a meeting held online due to the pandemic. Thiele has a virtual veto, as only 38% of shareholders have registered to vote.
Thiele’s backing will come as a relief to Chancellor Angela Merkel, who could ill afford another high-profile business collapse following the failure of payments firm Wirecard.
Lufthansa, which traces its roots back almost a century, employs around 138,000 people and owns brands including Eurowings and Austrian Airlines.
It has been brought to its knees by COVID-19 and what promises to be a protracted travel slump, and like many rivals across the world, sought state help to stay afloat. Even after Thursday’s gains, its shares are down almost 40% this year.
Also on Thursday, European Union regulators approved Lufthansa’s 6 billion euro recapitalisation, part of the bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid.