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Lufthansa In Advanced Talks With WSF For EUR 9 Bln Stabilization Package

Deutsche Lufthansa AG (DLAKF,DLAKY) on Thursday confirmed advanced discussions with representatives of the Economic Stabilization Fund or WSF of the Federal Republic of Germany on the concrete design of a stabilization package.

The concept provides for stabilization measures of up to 9 billion euros, of which 3 billion euros is in the form of a KfW loan. The concept is yet to be finalized.

In addition, the WSF is to provide a silent participation.

The company noted that the WSF is also to obtain a stake in shares of Deutsche Lufthansa amounting to 20% of the increased share capital. This is by way of a capital increase at the nominal value per share, potentially reduced by a capital cut, excluding the subscription rights of existing shareholders with a corresponding dilution effect.

Further, a convertible bond need to be agreed with the WSF, which can be exchanged for a further 5% plus one share also at the nominal value in the event of a public takeover offer by a third party.

In addition, two seats on the Supervisory Board are to be filled in agreement with the Federal Government.

Lufthansa will conduct an Extraordinary General Meeting to decide on the capital increases. The granting of the silent participation and the granting of the loan are subject to the feasibility of the capital increase.

The stabilization package requires the approval of the WSF Committee as well as the Company's Executive Board and Supervisory Board. It is also subject to approval by the European Commission.

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