Lufthansa’s 6 billion-Euro German recapitalization gets EU nod

Deutsche Lufthansa AG won European Union approval to receive a 6 billion-euro ($6.75 billion) recapitalization from the German government, hours before shareholders vote on the rescue package that will dilute their stakes.

The European Commission said in a statement on Thursday that Germany’s plan to take a 20% stake in Europe’s largest airline is in line with strict state-aid rules. The EU approval covers Germany’s 300 million-euro equity participation, a 4.7 billion-euro silent participation with features of a non-convertible equity instrument and a 1 billion-euro silent participation with the features of a non-convertible debt instrument.

Germany’s bailout for Lufthansa overcame one major roadblock when the airline’s biggest stockholder said he’d vote in favor of the rescue package at a special shareholder meeting later Thursday. He had earlier criticized a steep discount being granted to the German government on a 20% stake, and held the votes to single-handedly stop the share sale.