Lufthansa warns of threat to €9bn rescue deal

German flag carrier Lufthansa warned its €9bn bailout could be at risk after its largest single shareholder attacked the deal ahead of a crucial investor vote next week.

The company warned the deal could fail to gain the two-thirds shareholder approval required after German billionaire Heinz-Hermann Thiele accused the company of not exploring all available options.

Under the terms of the deal, the German state would take a 20% stake in the airline plus a blocking share against hostile takeovers, along with two seats on the supervisory board.

In an interview with German daily Frankfurter Allgemeine Zeitung Thiele also announced that he had in fact taken his stake in the airline to over 15% of its share capital.

If Lufthansa failed to win over shareholders it could be forced to seek protective shield proceedings under insolvency law.

"The management board urgently appeals to all private and institutional shareholders to exercise their voting rights and to participate in the decision about the future of the company," Lufthansa said in a statement.

Thiele said he was "not satisfied by ... that everything was examined and that some ideas could not have been implemented. I believe that negotiations could have been more intense", but declined to say whether he would vote against the move.

Thiele said indirect aid through the state-owned KfW development bank could be an alternative option.

“My goal is to create an understanding that there could actually be an alternative - even though this is being denied by management. It is possible to hold talks and clarify where there is leeway.”

Lufthansa on Tuesday said it was looking to reach a deal with unions by next week on how to cut 22,000 full time jobs in response to the impact of the coronavirus pandemic.

Airlines across the world have grounded the majority of their fleets as governments imposed lockdowns to stymie the spread of the virus that has so far killed more than 430,000 people globally. The resultant slump in demand has left them burning through cash reserves, even with state bailouts.

Lufthansa suffered a 98% slump in April passengers numbers, and a 26% year-on-year fall in the first quarter. It last week reported that first quarter net losses blew out to €2.1bn (£1.87bn) compared with losses of €342m a year earlier.

(Writing by Frank Prenesti. Editing by Michele Maatouk)