Lufthansa wants capital boost at BMI

LONDON (Reuters) - Lufthansa <LHAG.DE> could walk away from its takeover of BMI British Midland unless BMI's majority investor provides it with more capital, the Financial Times reported, citing Lufthansa finance chief Stephan Gemkow.

The paper quoted Gemkow as saying that BMI's weak finances meant that contractual conditions for the takeover had not been met.

"What we want to have is the company in its contractually agreed state and that means the company has the licences it needs to operate and the funds it needs to operate," the paper quoted him as saying.

"We have a situation in which, to our understanding, the conditions have not been met...if they are not met, one day we will walk away."

Lufthansa agreed to take control of BMI last October after founder and controlling shareholder Sir Michael Bishop exercised an option to sell it his stake of 50 percent plus one share.

Lufthansa already owns 30 percent minus one share of BMI while Scandinavian airline SAS holds 20 percent.

Last week, a Lufthansa spokeswoman told Reuters that the approval of the European Union's anti-trust authority, granted on Thursday, meant that one of the conditions of the deal had been met, "but not all.

(Reporting by Myles Neligan)

Article Published: 19/05/2009