Bishop goes to court to force Lufthansa to complete BMI buy
Thursday 21 May 2009
Sir Michael Bishop, the chairman of BMI British Midland, launched High Court proceedings against Lufthansa yesterday to try to force the German airline to complete its purchase of BMI.
In 1999, Sir Michael signed a deal with Lufthansa for the sale of BMI over a 10-year period. The contract is now due, but a row has erupted over whether the terms have been met.
The Lufthansa chief financial officer, Stephan Gemkow, said in a newspaper interview this week that BMI's troubled finances were a problem and that Sir Michael could be required to inject more cash. But BMI claims that all the necessary regulatory and commercial conditions are in place, and Sir Michael has gone to the courts to force Lufthansa's hand.
A spokesman for Lufthansa said: "Of course we are involved with the BMI integration, but there appears to be a discrepancy over whether all the criteria have been met." Sir Michael owns 50 per cent plus one share of the UK carrier. Lufthansa already owns nearly 30 per cent and is to buy Sir Michael out for about €400m (£351m). The remaining 20 per cent is owned by SAS, the Scandinavian airline. Last year, BMI made annual losses of about £100m.
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