German Mogul Builds War Chest Ahead of Lufthansa Aid Vote

The German billionaire who owns the biggest stake in Deutsche Lufthansa AG is building a war chest of cash as he agitates for eleventh-hour changes to the distressed airline’s 9 billion-euro ($10 billion) rescue.

Heinz Hermann Thiele said Thursday that he plans to sell 8 million shares of Knorr-Bremse AG, the Munich-based brake-maker that underpins his $16.9 billion fortune. The move will provide about $850 million in cash for the 79-year-old investor as he contemplates his next move.

The proceeds will be used “to support Mr. Thiele’s other private investments,” his KB Holding GmbH said in a statement.

Stocking up on cash gives Thiele flexibility, including to further increase his stake in Lufthansa, and provides him with leverage as the airline heads into a crucial shareholder vote next week to approve elements of the German aid package.

Thiele disclosed earlier this week that he had increased his holding in the carrier by more than half, to about 15.5%. He told German newspaper Frankfurter Allgemeine Sonntagszeitung that he’s unhappy with terms of the bailout and wants a better deal for shareholders, though he stopped short of saying he’d oppose it.

Handelsblatt separately reported that Thiele is seeking talks with Finance Minister Olaf Scholz, who so far has refused to alter a package that took months to pull together.

Economy Ministry spokesman Korbinian Wagner declined to comment Friday on whether a meeting is scheduled with Thiele. Finance Ministry spokesman Christoph Kuhn referred to Scholz’s comments this week when he said there is a “good offer on the table.”

Brussels Threat

The complex dynamics at play have turned the rescue of Europe’s biggest airline into a white-knuckle ride. Thiele’s incursion comes at a crucial time, ahead of a shareholder vote scheduled for June 25 that Lufthansa has warned is in danger of failing. The airline group has said it faces a cash crunch and may not be able to pay its employees in July.

Bailout negotiations in other countries where Lufthansa owns airlines are also factoring into the talks. Switzerland is guaranteeing loans of 1.28 billion francs ($1.35 billion), while Austria’s government and the country’s banks will inject 450 million euros.

Talks with Belgium are ongoing, with the Brussels Times reporting on Friday that Lufthansa may allow its Brussels Airlines unit to go bankrupt if no deal is reached. The boards of the airline unit and Lufthansa Group are set to meet on Monday, the newspaper said.

Lufthansa declined to comment on the report. A spokesman for the Belgian Finance Ministry had no immediate comment.

Germany is negotiating with Lufthansa to reduce the size of its bailout as aid from other the countries takes shape, Bloomberg News reported earlier. That negotiation, however, is focused on a state-backed loan program covering about one-third of the German package.

Thiele has taken issue with a different element—stock being granted to the government at a discount.

Modest Start

Thiele had modest beginnings. He started at Knorr-Bremse in 1969 as a legal specialist in the patents department, and rose through the ranks before buying the company in 1985. At that point Thiele hadn’t even repaid the mortgage on his house, he said in an interview with FAZ. In 2011, Knorr-Bremse said Thiele was increasingly focusing on his personal interests.Thiele plans to hand over Knorr-Bremse to his daughter and has told local media that estate planning factored into his decision to list the company in 2018, which helped to catapult Thiele higher in the ranks of Germany’s wealthiest. He’s now the nation’s third-richest, according to the Bloomberg Billionaires Index, behind shipping billionaire Klaus-Michael Kuehne and SAP SE co-founder Hasso Plattner.

With his recent purchases, Thiele’s stake in Lufthansa totals about 733 million euros. Shares of the Frankfurt-based airline are down 39% this year. He still controls about 65% of Knorr-Bremse. Its stock price has increased about 2% this year.