Lufthansa shares fly on privatisation hopes
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Your support makes all the difference.SHARES in Lufthansa, the German carrier, bucked a weakening Frankfurt market yesterday with news the government expected to announce its privatisation plans for the airline today.
The share price of the airline, 51 per cent-owned by the state, jumped by more than DM7 to DM223 (pounds 90.28) in after-hours trading as analysts predicted the government would offer a solution to the problem of Lufthansa's pension fund - the main obstacle delaying privatisation.
Theo Waigel, the Finance Minister, Matthias Wissmann, the Transport Minister, and Jurgen Weber, Lufthansa's chief executive, will take part in the announcement.
Lufthansa, which is starved for cash, wants to increase its capital by a nominal DM500m, reducing the state's share below 50 per cent and so triggering the privatisation process.
But before this can take place, the government must clarify who is going to assume the DM3-DM4bn estimated cost of transferring the supplementary pension rights of Lufthansa staff from the state scheme to a privatised fund.
Analysts said any capital increase would fail unless it was clear that a group other than the airline would bear the brunt of the pension-switch burden.
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