Deutsche Lufthansa AG’s supervisory board backed a 9 billion-euro ($10 billion) bailout by the German government, paving the way for the airline to receive the lifeline should investors approve it.
With cash reserves dwindling, the board voted in favor of the plan and called an extraordinary shareholder meeting for June 25. Its approval was unexpectedly delayed last week after members balked at European Union demands for slot disposals, a matter resolved in a deal sealed late Friday.
Investors now face a choice between a capital hike that will dilute their holdings, or tipping Europe’s biggest airline toward insolvency. Lufthansa’s management has told German officials and labor representatives that it will run out of cash on June 15, people familiar with the matter have said.
“We recommend that our shareholders follow this path, even if it requires them to make substantial contributions to stabilizing their company,” supervisory board Chairman Karl-Ludwig Kley said in a statement, adding that the final accord had been “a very difficult decision” involving “intensive discussion.”