The largest German airline Lufthansa gears up for bailout showdown with investors

Lufthansa’s Chief Executive Officer Carsten Spohr announced on Sunday that the company would seek to avoid grounding and insolvency before a showdown between the airline’s biggest shareholder and the German government over the terms of a 9 billion Euro bailout.

Lufthansa’s (LHAG.DE) shares were down by 5.7% on Monday morning.

The 79-year-old billionaire Heinz Hermann Thiele declined to the terms of the bailout deal. While his intentions are unclear, he has expressed dissatisfaction with the rescue plan. Thiele has a 15.5% stake in Lufthansa, making him the largest shareholder of the company.

The 9 billion Euro bailout deal would give the German government a 20% direct stake in the company as well as two seats on its supervisory board.

“The government has presented a good and balanced offer to which the supervisory board has agreed,” Germany’s Economy Ministry Spokesman Korbinian Wagner said in an interview.