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A Lufthansa jet is seen behind a barbed-wire fence at an airport in Frankfurt, Germany, on June 2, 2020.

Kai Pfaffenbach/Reuters

The German government held talks with Lufthansa’s biggest shareholder on Monday to persuade him to accept the terms of a 9 billion euro ($10 billion) coronavirus bailout that it has offered the airline group.

Finance Minister Olaf Scholz voiced confidence that investors would approve the deal after he met Heinz Thiele, who owns 15.5 per cent of the group and had threatened to block the aid at a shareholder meeting on Thursday.

Scholz said the proposal to be put to shareholders had been “carefully weighed” in negotiations with Lufthansa and the EU, adding: “This will be taken into account, I think, by the shareholders.”

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Lufthansa shares, which had fallen as much as 8.8 per cent earlier in the session, recovered some of their losses to close 3.2 per cent lower on the day the group exited Germany’s benchmark DAX stock index, a relegation announced this month.

The airline has been hit hard by the pandemic and what promises to be a protracted travel slump, and has sought a state rescue to avoid insolvency.

Billionaire Thiele, who could not be reached for comment, objected to bailout terms that would see the state acquire a 20 per cent stake and board seats, diluting existing shareholdings. He instead proposed an indirect holding via Germany’s KfW development bank. Lufthansa declined to comment.

CEO Carsten Spohr had told employees at the weekend that shareholders representing less than 38 per cent of shares had registered to vote, handing Thiele a virtual veto on the bailout, which needs two-thirds of votes to pass.

The group said last week that a “no” vote would force it to seek protection from creditors. That could eventually lead to break-up pressures on the group, whose other carriers include Austrian Airlines, Brussels Airlines and Swiss.

Scholz, who met Thiele on Monday along with Economy Minister Peter Altmaier, has refused to countenance changes to the complex deal.

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