The Lufthansa / BMI Thing (merged)
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Purely an attempt to reduce the price LH are paying for Bishop's stake in bmi. The price was agreed in 1999 and with the current economic outlook it's way over the odds. Can't blame Lufthansa really!
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I suppose we can now add BMI to the list of defunct British airlines.
I think BMI will remain a strong british brand - just because it is owned by 'ze germans' doens't make a lot of odds. Who the hell knows who owns what these days?. Hell most of BA probably belongs to some chinese hedge fund or something.
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Leading German carrier Lufthansa is no longer interested in acquiring full control of British airline bmi because the price is too high, Saturday's edition of Suddeutsche Zeitung reports.
Lufthansa management felt that bmi's financial position was worse than first thought, says the report.
The British airline lost 112 million euros (151 million dollars) in 2008.
The report, which did not cite any sources, follows Thursday's decision by EU antitrust regulators to approve the deal whereby Lufthansa would increase its 30 percent stake in bmi to 80 percent.
Lufthansa management felt that bmi's financial position was worse than first thought, says the report.
The British airline lost 112 million euros (151 million dollars) in 2008.
The report, which did not cite any sources, follows Thursday's decision by EU antitrust regulators to approve the deal whereby Lufthansa would increase its 30 percent stake in bmi to 80 percent.
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Links, confirming the above.....
Air&Cosmos
Luftfahrt - Raus aus dem Vertrag - Wirtschaft - sueddeutsche.de
Air&Cosmos
Luftfahrt - Raus aus dem Vertrag - Wirtschaft - sueddeutsche.de
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Originally Posted by flying macaco
Is this just a bit of speculation then or anything concrete??
, hence weren't feeling so sure about referencing.
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bmi chairman takes Lufthansa to court
It seems that Sir Michael Bishop has had enough of Lufthansa not playing ball with their agreement to buy bmi (formerly British Midland) and has instigated legal action in the High Court in London.
Lufthansa faces court action over BMI stake
By Kevin Done in London
Published: May 20 2009 19:40 | Last updated: May 20 2009 19:40
Sir Michael Bishop, chairman and controlling shareholder of BMI British Midland, resorted to legal action on Wednesday in an effort to force Lufthansa to take over his majority stake in the struggling UK airline.
He is seeking to enforce a long-standing contract under which he had an option to require the German aviation group to take over his stake of 50 per cent plus one share in BMI.
EDITOR’S CHOICE
Air France-KLM signs Delta pact - May-20
Lufthansa seeks BMI cash fillip - May-19
Air France-KLM scraps dividend - May-19
Branson hits out at BA/AA tie-up - May-14
He exercised the option in October last year to sell the stake for about €400m ($551m). The deal had been expected to be completed by mid-January.
The transaction was delayed, partly by the longer than expected time it took to gain approval from the European competition authorities, but Brussels finally gave the go-ahead last week.
In the meantime, tensions have been growing between the two sides. Lufthansa sought to force Sir Michael to make a capital injection of about £100m into BMI to strengthen the airline’s balance sheet ahead of a transfer of the shares.
Sir Michael believes the demand for extra finance is a device by Lufthansa to try to force down the price, which had already been agreed in the original contract 10 years ago.
His company, BBW Partnership, said Wednesday night it had issued proceedings in the High Court in London to declare that BBW had “fulfilled all the necessary regulatory requirements to complete the sale of BMI to Lufthansa and seek that Lufthansa be required to complete the acquisition of the shares”.
Lufthansa said Wednesday night it had not been informed of the legal action. “We have not received any communication,” it said.
The German group owns a stake of 30 per cent minus one share in BMI, while SAS Scandinavian Airlines holds the remaining 20 per cent.
Sir Michael’s decision to take legal action follows a warning by Stephan Gemkow, Lufthansa chief financial officer in an interview with the FT this week, that the German group could walk away from the planned takeover unless Sir Michael agreed to inject more capital.
Under European law, aviation regulators must be satisfied about an airline’s business plan and its funding in order for it to keep its operating licence.
The UK carrier is the second-largest airline operating at London Heathrow. Its main strategic asset is its control of about 11 per cent of all the take-off and landing slots at the airport.
Lufthansa faces court action over BMI stake
By Kevin Done in London
Published: May 20 2009 19:40 | Last updated: May 20 2009 19:40
Sir Michael Bishop, chairman and controlling shareholder of BMI British Midland, resorted to legal action on Wednesday in an effort to force Lufthansa to take over his majority stake in the struggling UK airline.
He is seeking to enforce a long-standing contract under which he had an option to require the German aviation group to take over his stake of 50 per cent plus one share in BMI.
EDITOR’S CHOICE
Air France-KLM signs Delta pact - May-20
Lufthansa seeks BMI cash fillip - May-19
Air France-KLM scraps dividend - May-19
Branson hits out at BA/AA tie-up - May-14
He exercised the option in October last year to sell the stake for about €400m ($551m). The deal had been expected to be completed by mid-January.
The transaction was delayed, partly by the longer than expected time it took to gain approval from the European competition authorities, but Brussels finally gave the go-ahead last week.
In the meantime, tensions have been growing between the two sides. Lufthansa sought to force Sir Michael to make a capital injection of about £100m into BMI to strengthen the airline’s balance sheet ahead of a transfer of the shares.
Sir Michael believes the demand for extra finance is a device by Lufthansa to try to force down the price, which had already been agreed in the original contract 10 years ago.
His company, BBW Partnership, said Wednesday night it had issued proceedings in the High Court in London to declare that BBW had “fulfilled all the necessary regulatory requirements to complete the sale of BMI to Lufthansa and seek that Lufthansa be required to complete the acquisition of the shares”.
Lufthansa said Wednesday night it had not been informed of the legal action. “We have not received any communication,” it said.
The German group owns a stake of 30 per cent minus one share in BMI, while SAS Scandinavian Airlines holds the remaining 20 per cent.
Sir Michael’s decision to take legal action follows a warning by Stephan Gemkow, Lufthansa chief financial officer in an interview with the FT this week, that the German group could walk away from the planned takeover unless Sir Michael agreed to inject more capital.
Under European law, aviation regulators must be satisfied about an airline’s business plan and its funding in order for it to keep its operating licence.
The UK carrier is the second-largest airline operating at London Heathrow. Its main strategic asset is its control of about 11 per cent of all the take-off and landing slots at the airport.
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In the meantime, tensions have been growing between the two sides. Lufthansa sought to force Sir Michael to make a capital injection of about £100m into BMI to strengthen the airline’s balance sheet ahead of a transfer of the shares.
Sir Michael believes the demand for extra finance is a device by Lufthansa to try to force down the price, which had already been agreed in the original contract 10 years ago.
Sir Michael believes the demand for extra finance is a device by Lufthansa to try to force down the price, which had already been agreed in the original contract 10 years ago.
Sir Michael’s decision to take legal action follows a warning by Stephan Gemkow, Lufthansa chief financial officer in an interview with the FT this week, that the German group could walk away from the planned takeover unless Sir Michael agreed to inject more capital.
Under European law, aviation regulators must be satisfied about an airline’s business plan and its funding in order for it to keep its operating licence.
Under European law, aviation regulators must be satisfied about an airline’s business plan and its funding in order for it to keep its operating licence.
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Will be difficult for Lufthansa to go this way. In principal Lufthansa is right, probably LH agreed to buy a intact company with all the licenses in place. Now the to be delivered item does not fulfill anymore one crucial item, the operating license and therefore the to be delivered item is not of the quality described. The only weak point in this is, that the agreement has been concluded many months before and at the time probably the situation in BMI was differently than now. So the sale was just awaiting EU approval and then completed. I think LH has a 50 to 50 chance to succeed with this strategy, depending on the court.
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bmi has an operators licence otherwise we wouldn't be flying! As for the 3 months working capital, I cannot say.
I feel bmi management may have been a bit slippery with the accounts. Posting large write down losses and clearing the decks in a fiscal sense for 2 reasons.
1 To use as a tool to force the workforce to accept a wage freeze.
2 To make the the figures next year under the control of Lufthansa seem like there has been a magnificent turn around.
This would give certain management a chance to hold their current posts ie NT.
Lufthansa may have also been playing the game too. Application to the EU was only applied for in April. Why the delay? In my mind, they knew the financial situation at bmi like any other airline would deteriorate in the intervening months so having a stronger negotiating position. They may also feel Bishop could inject some of the money made from the Euro exchange rate change.
bmi have weathered the storms of economic downturn in the past. Bishop has been good in that, but now it is time for a new start with Lufthansa and I wouldn't bet against SMB that this is what will happen.
D and F
I feel bmi management may have been a bit slippery with the accounts. Posting large write down losses and clearing the decks in a fiscal sense for 2 reasons.
1 To use as a tool to force the workforce to accept a wage freeze.
2 To make the the figures next year under the control of Lufthansa seem like there has been a magnificent turn around.
This would give certain management a chance to hold their current posts ie NT.
Lufthansa may have also been playing the game too. Application to the EU was only applied for in April. Why the delay? In my mind, they knew the financial situation at bmi like any other airline would deteriorate in the intervening months so having a stronger negotiating position. They may also feel Bishop could inject some of the money made from the Euro exchange rate change.
bmi have weathered the storms of economic downturn in the past. Bishop has been good in that, but now it is time for a new start with Lufthansa and I wouldn't bet against SMB that this is what will happen.
D and F
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[QUOTE]Presumably Midland will survive, but in a very different form, if Lufthansa don't do the deal[QUOTE]
Yeah, unprofitable and shrinking with management who have a poor relationship with their staff!
D and F
Yeah, unprofitable and shrinking with management who have a poor relationship with their staff!
D and F
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Its a bit of a bugger when people don't do what they are contracted to do, a bit like the pay deal...........oh i forgot BALPA isn't taking bmi to court for breach of contract!!!!!!!!!