Lufthansa to sell JetBlue stake

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By TESTCustomwebLP TESTCustomwebLP February 19, 2015 11:46

Lufthansa to sell JetBlue stake

Deutsche Lufthansa is selling its 15% stake in JetBlue Airways after seven years via an early redemption of Lufthansa bonds convertible into JetBlue shares.

The German airline is launching a voluntary incentive payment offer to holders of the €234.4 million 0.75% exchangeable senior notes due 2017 issued by Lufthansa Malta Blues and guaranteed by Lufthansa, to exchange their Notes into shares of common stock of JetBlue in return for a cash incentive payment for each noteholder that exercises their exchange rights prior to the expiration of the offer on March 17, 2015 at 11:59 pm EST.

Noteholders who validly accept the offer prior to the “Early Participation Deadline at 5:00 pm EST on March 3, 2015 will be eligible to receive the Early Participation Consideration, equal to €2,500 per €100,000 principal amount of Notes that are duly submitted for acceptance. Noteholders who validly accept the Offer after that time but prior to the Expiration Deadline will be eligible to receive the Incentive Offer Consideration only, equal to €1,750 per €100,000 principal amount. No accrued interest will be paid, and no further payments will be made in respect of Notes exchanged in connection with the Offer.

The payment of the Early Participation Consideration or the Incentive Offer Consideration, as the case may be, and the delivery of the Shares are expected to take place on March 26, 2015.

If following the Offer, 90% or more of the Notes originally issued have been exchanged, Lufthansa states that it will have the right to redeem the remaining Notes that remain outstanding at their principal amount together with accrued interest, pursuant to the Indenture governing the Notes.

In 2012, through a fully consolidated Lufthansa Group company, Lufthansa successfully raised €234.4 million in gross proceeds through the issuance of the Notes. The Notes are due in 2017 and are exchangeable into Shares of JetBlue at the option of the Noteholders.

Lufthansa intends to improve its financial debt profile with this offering. A successful transaction will allow for an early retirement of the notes and a corresponding reduction in Lufthansa Group’s balance sheet debt, while finalising the disposition of all or part of its share in JetBlue.

Morgan Stanley is acting as dealer manager for the Offer.

Lufthansa no longer needs a New York partner when United Airlines added a hub in nearby Newark to the Star Alliance. The German carrier first broached the possibility of selling its JetBlue stake in September 2011.

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By TESTCustomwebLP TESTCustomwebLP February 19, 2015 11:46