Lufthansa has decided not to buy back its own shares after foreign investors increased their shareholding to nearly 40.7% of the total stock, because the German carrier sees no “immediate danger” of excessive foreign control.
The airline has issued a mandatory notice that the combined shareholding of non-German investors has surpassed the 40% mark – a threshold that authorises Lufthansa to intervene with the trading of its shares to prevent excessive foreign control.
German shareholders must hold the majority of shares for the airline to maintain traffic rights which have been arranged under air transport agreements between Germany and states outside the European Union.
As long as the percentage of foreign shareholders falls “sufficiently short of 50%”, Lufthansa will not intervene in share trading, it says.
Foreign shareholdings could be reduced by requiring investors in question to sell their stock, issuing new shares or buying back shares.
Lufthansa is “currently” not intending to buy back shares, it says. The airline adds that after “careful analysis, the company does not believe that there is any immediate danger of excessive foreign control and has confidence in the self-regulation capacity of the capital market”.