Lufthansa's chances of winning approval for a 9 billion euros government bailout improved on Wednesday after billionaire Heinz Hermann Thiele, who owns a 15.5% stake, told Frankfurter Allgemeine Zeitung he would endorse the rescue.
"I will vote for the proposal," the paper late on Wednesday quoted Thiele, who owns a 15.5% stake in Lufthansa, as saying.
His endorsement amount to an 11th-hour respite for the airline amid growing fears he could veto the proposed rescue package, which would see Germany buy 20% of the airline group at 2.56 euros per share.
Lufthansa declined to comment.
Thiele's comments come after a meeting top government officials and after the airline drew up an alternative bailout plan, a source told Reuters.
Thiele's criticism sparked fears that the bailout would fail and Lufthansa would have to seek protection from creditors within days.
Under the fallback plan described by a company source, Lufthansa would have responded by splitting the capital increase into two stages, with a first 10% tranche sold to the government at the heavily discounted price.
That step, requiring no vote, would be followed by a rights issue open to all shareholders in which Germany could raise its stake to 20% at a much smaller discount. As originally proposed, a loan from state-owned KfW bank and a repayable "silent participation" could take the total to 9 billion euros.
A Lufthansa spokesman declined to comment or to confirm any discussion of a fallback plan.
Thiele's 15.5% stake gives him considerable clout at the EBM where only 38% of shareholders have registered to vote, and where the airline needs a two-thirds majority for it to pass.
"There is an offer on the table that has been coordinated with the company and the EU Commission," a finance ministry spokesman said, declining further comment.
Thiele, who could not be reached for comment, had earlier proposed that Germany acquire shares through KfW instead of a direct holding with board representation.
Any move into bankruptcy protection could lead to break-up pressures on Lufthansa Group, whose other carriers include Austrian Airlines, Brussels Airlines and Swiss.
In separate union negotiations designed to cut labour costs, Lufthansa pilots and cabin crew have offered measures worth 1.55 billion euros in savings in exchange for job guarantees.
Finance Minister Olaf Scholz had voiced confidence that the bailout deal would be approved after talks with Thiele on Monday. But the businessman has since kept silent.
"Investors involved in Lufthansa have been pondering how the major shareholder will cast his defining bailout-ratifying vote," Citi analyst Mark Manduca said earlier on Wednesday.
"The company has already run out of money, with the balance sheet lost in imminent liabilities."
(Reporting by Edward Taylor; Additional reporting by Ilona Wissenbach; Editing by Maria Sheahan and Angus MacSwan)