Lufthansa warns rescue threatened as billionaire weighs in

Lufthansa has already warned that 22,000 full-time positions out of 135,000 worldwide must be slashed. (AFP file photo)
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Updated 17 June 2020

Lufthansa warns rescue threatened as billionaire weighs in

  • Group has already warned that 22,000 full-time positions out of 135,000 worldwide must be slashed

FRANKFURT AM MAIN: European airline giant Lufthansa warned Wednesday that a billionaire investor could block a $10.1 billion pandemic rescue plan agreed with the German state.
With attendance at a general shareholder meeting next week expected to be low, “the board considers it possible that the stabilization package could fail,” Lufthansa said in a statement, pointing to “the latest public statements by the company’s largest single shareholder, Heinz-Hermann Thiele.”
“The management board urgently appeals to all... shareholders to exercise their voting rights,” the company added.
Only a simple majority is needed for approval if the holders of more than 50 percent of shares vote, while lower participation ups the threshold to two thirds.
Just two weeks ago, chief executive Carsten Spohr had said he was “confident that the measures will receive a majority.”
Plans to save the group from the fallout of the coronavirus pandemic would see the state climb aboard with a 20-percent stake, with an option on a further five percent plus one share to block hostile takeovers.
In an interview with the Frankfurter Allgemeine Zeitung (FAZ) daily published late Tuesday, rail industry billionaire Thiele said he had increased his stake in Lufthansa in recent weeks to 15 percent.
But he said his snapping up shares was “not a signal that I will vote against anything at the general meeting.”
Thiele had announced in March that he held 10 percent, making him the group’s biggest single investor.
He told FAZ airline bosses “could have negotiated more toughly” with Berlin over the rescue package.
“Not all the possibilities were exhausted” before deciding to dilute existing investors’ holdings to make room for Berlin, Thiele charged.
“It’s conceivable that we can discuss and clear up where there is still room for maneuver” before the June 25 meeting, he said.
Thiele pointed to other European airlines like Air France/KLM, which have received state aid in the form of loans rather than government shareholdings.
With government-appointed members around the supervisory board table under the Lufthansa rescue plan, necessary harsh restructuring moves like job cuts could be made more difficult or even blocked, Thiele argued.
The group has already warned that 22,000 full-time positions out of 135,000 worldwide must be slashed, as demand is expected to remain far below pre-pandemic levels for years to come.
Without the rescue, Lufthansa “would possibly have to apply for protective shield proceedings under insolvency law ... if no other solution is found immediately,” the company said.


Scammers fool Britons with investment firm clones, says trade body

Updated 29 min 41 sec ago

Scammers fool Britons with investment firm clones, says trade body

  • Losses amounted to 9.4 million pounds ($12.56 million) between March and mid-October

LONDON: More than 200 British retail investors have lost nearly 10 million pounds ($13.4 million) in total to sophisticated investment scams since a government lockdown in March to fight the COVID-19 pandemic, a trade body said on Saturday.
Fraudsters cloned genuine investment management firms’ websites and documentation, and advertised fake products on sham price comparison websites and on social media, the Investment Association said.
Greater financial uncertainty and more time spent online have likely contributed to the increase in scams, industry sources say.
Losses amounted to 9.4 million pounds ($12.56 million) between March and mid-October, the IA said, based on information it got from member firms which had been cloned.
“In a year clouded in uncertainty, organized criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings,” Chris Cummings, chief executive of the Investment Association said.
The investment management industry was working closely with police and regulators to stop the scams, he added.
Britain’s Action Fraud warned earlier this month that total reported losses from all types of investment fraud came to 657 million pounds between September 2019 and September 2020, a rise of 28% from a year ago. Reports spiked between May and September, following Britain’s first national lockdown, the national fraud and cybercrime reporting center added.