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Germany vectors a steady Lufthansa landing

Germany vectors a steady Lufthansa landing

Airline pilots try to avoid rocky landings. The German government is doing its bit to assist Deutsche Lufthansa (LHAG.DE) as the battered airline prepares its approach for an equity raise following a torrid pandemic. Berlin said on Monday it plans to sell a quarter of the 20% stake acquired last year via a 9 billion euro bailout. The news sent Lufthansa’s shares down 4% on Monday.

The capital hike will likely go better if investors can see the German government’s stake getting smaller. They will fret that ongoing state ownership could limit Lufthansa Chief Executive Carsten Spohr’s scope to make necessary job cuts. On the other hand, selling down a bigger stake prior to a capital increase that could restore Lufthansa’s fortunes, and therefore its share price, doesn’t sound great for the taxpayer. Hence the halfway house. (By Aimee Donnellan)

 SOURCE: https://www.reuters.com

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