FRANKFURT (S&P Global Ratings) --S&P Global Ratings today said that there is a risk that Deutsche Lufthansa AG (BB+/Watch Neg/B) might not approve the proposed EUR9 billion state aid package agreed with the Economic Stabilization Fund at its Extraordinary General Meeting.

The stabilization package is to be composed of EUR5.7 billion silent participation and EUR3.0 billion state-guaranteed loan, and incorporates a 20% stake in the company's share capital by the German government at a share price of EUR2.56 equivalent to EUR300 million of cash injection. We understand that attendance at the meeting on June 25 will be below 50%. Based on the most recent public statements by the company's largest shareholder, Heinz-Hermann Thiele, about his dissatisfaction with the stabilization package' terms, we believe the package might not achieve the two-thirds majority required in this case. This would mean that Lufthansa could apply for protective shield proceedings under insolvency law after the meeting, as stated by the company, if no other solution is found. Our base-case assumption remains that Lufthansa will obtain a state aid package amounting to EUR9 billion. However, our ratings remain on CreditWatch with negative implications, indicating that we could downgrade Lufthansa by multiple notches if the expected government support does not materialize.

This report does not constitute a rating action.

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