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Finance Minister Olaf Scholz (SPD) no longer has to worry about a billion dollar loan to Lufthansa.

The airline has so far made little use of its nine billion euro aid package from Germany, Austria, Switzerland and Belgium put together in summer 2020.

Now, according to its own information, the airline has even repaid the loan amount of one billion euros actually drawn from the state-owned KfW bank early.

The airline was able to raise the money on the private capital market at more favorable terms.

Lufthansa says in a claused manner: “The refinancing will even lower our financing costs.” Essentially, two new bonds for a total of 1.6 billion euros are used for rescheduling.

The switch from government loans to public bonds gives the airline new freedoms.

Aircraft pledged to KfW as collateral for the billion-dollar loan are now freely available again, the airline said.

This would allow the airline to earn new money through sale and lease back.

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The repayment of the KfW share does not change anything in the German state participation of 20 percent in the airline, which is deeply in the red due to the corona crisis including travel restrictions.

So far, the airline has received 2.7 billion euros from the stabilization packages.

Namely one billion from a silent participation of the Federal Economic Stabilization Fund (WSF) and one billion euros from the KfW syndicated loan and other amounts.

However, with the state share, the airline again enjoys more reputation and security for the survival of Germany's largest aviation group by far.

Lufthansa is practically ready for the capital market again, while in the summer of crisis 2020 the airline was threatened with over-indebtedness if it had not received new equity from the state and thus could also take out credit.

In fact, Lufthansa was able to get new money on the capital market twice in November.

Further state aid needed

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With the long-term funds now raised and the funds raised over 2.1 billion euros in the second half of 2020, Lufthansa will be able to secure the refinancing of all financial liabilities due in 2021 of around 2.6 billion euros, according to the announcement.

The rescheduling of the loan and the large corporate bond are noteworthy because the airline was in the deep red in 2020.

Analysts expect on average that sales have slumped by a good 60 percent from 36.4 to 13.5 billion euros, with a loss of 6.63 billion euros after a profit of 1.2 billion euros in 2019.

This year sales could increase again to 20.6 billion euros with a loss of 1.8 billion euros.

Lufthansa will present the precise figures on March 4th.

CEO Carsten Spohr has already stated that it has been possible to reduce costs significantly faster than planned.

However, the group also cut 29,000 jobs.

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The early repayment of the KfW loan does not mean that the airline does not need further government aid after all.

“Despite the repayment, however, it is likely that we will use other elements of the stabilization package that are currently unused.

The extent to which we will do this depends on the further course of the pandemic, ”explains Lufthansa’s new CFO Remco Steenbergen.

At the end of September, the group had liquid funds or funds commitments amounting to ten billion euros.

The funds that have not been used so far include Silent Participation I of the Economic Stabilization Fund for 4.5 billion euros, which would strengthen the airline's equity.

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"Everything on shares" is the daily stock market shot from the WELT business editorial team.

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