April 29, 2020
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The Republic of Austria could participate in the German AUA mother Lufthansa, so that the Austrian subsidiary airline AUA has fresh equity. An unconfirmed report by the “Press” on Wednesday (online edition) speaks of EUR 267 million. This money would then come from the parent company to the AUA. However, COFAG says that the application for state aid is not yet approved.
According to the current market value, the EUR 267 million would correspond to a stake of almost seven percent in the German aviation group, the newspaper calculated. “The rest of the state aid would be divided into credit guarantees (410 million euros) and a non-repayable subsidy for fixed costs for closed companies (capped at 90 million euros),” reported the “press” without citing the source.
The AUA applied for EUR 767 million in state aid from the Corona Aid Fund in Austria on Tuesday evening. A large part of the sum consists of repayable loans, the other part are grants that are still to be negotiated, said AUA spokesman Peter Thier. On Wednesday at the APA, COFAG said that the application for state aid could not yet be approved. You need a ready-made loan agreement, at the moment there is only a so-called term sheet. In addition, the terms would not comply with the Corona Finance Agency guidelines.
The “press” also reported that the application was not yet approved. According to the newspaper, tomorrow, Thursday, the auditors will issue a continuation forecast for the AUA. If this turns out to be negative, the insolvency scenarios that have already been played through must be specified, the report says. At the same time, the AUA also has to push its employees through a tough austerity program in order to survive, and negotiations are taking place with the works council and unions.
Austria’s top government meets with Lufthansa CEO Carsten Spohr in Vienna on Wednesday evening. In addition to Chancellor Sebastian Kurz (ÖVP), Vice Chancellor Werner Kogler (Greens), Finance Minister Gernot Blümel (ÖVP) and State Secretary Magnus Brunner (ÖVP), the Minister of Climate Change, Leonore Gewessler (Greens), is also responsible. After the top meeting, experts will then negotiate the details. The ÖBAG state holding company is also said to be involved.
As it was said at the APA, the meeting between Spohr and Kurz is more about the basic framework. A breakthrough is not expected. This is also unlikely because the future of the AUA also depends on what is happening in Germany. The parent company Lufthansa itself needs state aid to survive.
A quick rescue was becoming apparent in Germany for the time being. “An agreement can be expected in the next one to two weeks,” it said on Wednesday in German negotiating circles. The Lufthansa Executive Board defends itself against too much state influence and therefore not only rolls over for the AUA, but also for itself insolvency scenarios. According to Reuters, the planned Group-wide Lufthansa rescue package is expected to include almost EUR 10 billion.
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