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German stabilisation fund cuts Lufthansa stake to below 10%

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FILE PHOTO: Planes of German air carrier Lufthansa are parked at Frankfurt airport
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BERLIN (Reuters) - Germany's state Economic Stabilisation Fund (ESF) has cut its stake in Deutsche Lufthansa to less than 10%, the Federal Finance Agency said on Wednesday, citing stabler conditions at the group.

The ESF took a 20% holding in Lufthansa as part of a government bailout to keep the airline afloat through the COVID-19 pandemic, and had previously reduced the share to 14.1%.

The further reduction came "against the backdrop of Lufthansa's stable corporate development", the agency said. "The ESF will sell its remaining shares by October 2023 at the latest."

The head of the agency, Jutta Doenges, added: "By falling below a shareholding of 10%, we have entered the home stretch to end the stabilisation measure for Lufthansa."

The largest Lufthansa shareholder is now Hamburg billionaire Klaus-Michael Kuehne, with more than 15%.

Separately on Wednesday, ground staff at Lufthansa went on strike, prompting the cancellation of more than 1,000 flights, and adding to travel disruptions during the busy summer travel season.

Labour union Verdi had called for the walkout, which is due to run until 6 a.m. (0400 GMT) on Thursday, over its demand for a 9.5% pay hike for around 20,000 workers, and warned that more industrial action could be on the cards.

Lufthansa said Wednesday was "a sad day" for holidaymakers who were unable to catch their flights due to the strike, adding that the walkout was unnecessary and out of proportion.

($1 = 0.9863 euros)

(Reporting by Paul Carrel and Alexander Huebner; Editing by Kirsti Knolle and Jan Harvey)

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