The German government has developed a Plan B to prevent a looming bankruptcy of the airline Lufthansa, Reuters reports, citing sources.

Lufthansa's bailout package risks diluting the shares of previous owners, prompting largest shareholder Heinz Hermann Thiele to back down and threaten to defeat the package in a vote on Thursday. His ownership stake combined with low voter turnout could be enough to defeat the proposal.

But in the event that Heinz Hermann Thiele emerges victorious in such a vote and the aid package falls through, the German government has drawn up a plan to still take 20 percent of the company, of which 10 percent in that case would go to the state by giving existing shareholders the right to subscribe for new shares in exchange for cash payment.

Lufthansa, like all airline competitors, was put in severe financial distress when Covid-19 broke out across the world and practically brought the entire travel industry to a standstill when borders were closed to prevent the spread of the virus.

Source: Direct News Agency