FILE PHOTO: Lufthansa planes are seen parked on the tarmac of Frankfurt Airport, Germany June 25, 2020. REUTERS/Kai Pfaffenbach

LONDON/FRANKFURT (Reuters) – German airline Lufthansa received strong investor backing for a 2.14 billion euro ($2.47 billion) rights issue, providing some encouragement for travel companies looking to weather the after effects of the COVID-19 crisis.

The company said on Wednesday that its rights issue was 98.36% subscribed by investors and that it would place the remaining shares in the open market shortly.

The cash will be used to repay a chunk of the 9 billion euro ($10.38 billion) government bailout it received last year to stay afloat throughout the COVID pandemic, which resulted in the Economic Stabilisation Fund (ESF) taking a stake in the group.

Lufthansa is one of several airlines and travel companies that have raised cash or are planning to raise funds to get through the toughest period for the sector in two decades.

Britain’s easyJet recently completed a 1.2 billion pound ($1.63 billion) rights issue, while tourism group TUI is planning a 1.1 billion euro rights issue in coming weeks and Air France is believed to be considering its options.

A solid deal for Lufthansa will provide some encouragement for the others.

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