Lufthansa calls for £100m injection
bmi's founder Sir Michael Bishop has snubbed Lufthansa's request for a £100m capital injection into the British airline, reports said today (May 12).
Lufthansa, currently in the process of taking over bmi, is reported to have asked shareholders to recapitalise or risk breaching regulatory rules.
Sir Michael is understood to have turned down Lufthansa's request and denied any possible rule-breaking.
Lufthansa is said to be concerned over a breach of a UK Civil Aviation Authority rule forcing an airline to have enough cash to operate for three months or risk losing its licence.
But it has been claimed the request is an attempt to sweeten the takeover of bmi which has been hit hard by the economic downturn.
Neither Lufthansa nor bmi were available for comment.
Last October Sir Michael exercised an option requiring Lufthansa to purchase a controlling share in bmi, as part of a deal struck in 1999.
Lufthansa agreed to buy an 80% holding for a reported £300m. The remaining 20% is held by Scandinavian airline SAS which has said it also wishes to sell.
Lufthansa is said to be desperate to attack British Airways' dominance at London Heathrow.
The takeover is set to boost Lufthansa's presence at the UK hub as bmi has the second highest number of airport slots.
But bmi recently reported a record loss of £99.7m for 2008 prompting it to announce new money saving measures including further capacity cuts and a staff pay freeze.
Lufthansa expects to hear on Thursday (May 14) whether it will be allowed by the EC to take a controlling interest in bmi.
The German airline is also awaiting EU approval for its takeover of both Austrian Airlines and Brussels Airlines.