Capital calls: Lufthansa’s capital increase may not be enough
Concise information on global finance.
OVERLOAD. Deutsche Lufthansa‘s (LHAG.DE) plans for a large cash injection from shareholders may not be enough to ensure a stable financial drain. The German carrier is looking to bring in equity investors for â¬ 3 billion, Reuters reported on Monday for more information. That’s almost half of its market value of 6.5 billion euros. The main goal of CEO Carsten Spohr is to repay the 1.3 billion euros of hybrid equity that the German government injected a year ago, as well as to repay loans worth an additional one billion euros from Austria, Belgium and Switzerland.
If the capital increase continues, Lufthansa’s net debt will fall to 9.2 billion euros. According to Refinitiv’s forecast, EBITDA is 21 times higher than expected for this year, and 3 times more worrying than the figure that analysts predicted for next year. The divestitures should make more money, but another summer washout could mean more losses. Shareholders may have to cough again. (By Ed Cropley)
On Twitter http://twitter.com/breakingviews
Earlier in capital calls:
South Korean Deals Tell Big Stories Read More
Wynn is betting too much on SPAC read more
Sabers down for the JEDI project read more
The Italian dynasty demands the repurchase of the road Read more
The IPO of French music touches a minor touch read more
Reuters Breakingviews is the world’s leading source for financial agenda-setting information. As the Reuters brand for financial commentary, we dissect big business and economic stories as they spread around the world every day. A global team of around 30 correspondents in New York, London, Hong Kong and other major cities provide real-time expert analysis.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and to www.breakingviews.com. All opinions expressed are those of the authors.