Europe news: Alitalia chief agrees to sell assets to investors

Europe news: Alitalia chief agrees to sell assets to investors

Posted by:Mark 47 days ago • Discuss

ROME – Alitalia's administrator formally agreed Thursday to sell part of the bankrupt airline's assets to a group of Italian investors in a deal worth more than euro1 billion $1.25 billion. Augusto Fantozzi said at a news conference he had accepted the offer by CAI Compagnia Aerea Italiana, the Italian Air Company created by the investors. "I formally accepted the offer," Fantozzi said. "I wish the new Alitalia a lot of success." The new Alitalia is expected to launch Dec. 1 — some two years after the government started the long and difficult process of unloading its 49.9 percent stake in the troubled carrier. The government gave its go-ahead to the deal Wednesday and the European Union approved it last week. The group of Italian investors will acquire Alitalia's profitable assets, including some of its planes and landing and takeoff slots, under a plan to relaunch the airline by cutting jobs and routes and combining it with the much smaller Air One, Italy's No. 2 carrier. The deal is worth euro1.052 billion $1.32 billion, with CAI taking on euro625 million $783.8 million in Alitalia debts and paying euro427 million $535.54 million in cash, Fantozzi said. He said Alitalia has at least euro3.2 billion $4.01 billion in debts and expects to lose euro1 billion $1.25 billion in 2008. How much creditors receive will depend on the sale of Alitalia's additional assets. No deals have yet been announced although Fantozzi says he has received many offers. The investors led by Roberto Colaninno, the chairman of scooter-maker Piaggio, are buying or leasing 93 of Alitalia's 173 aircraft. CAI also plans to hire 12,600 of Alitalia's 20,000 employees. Some unions representing pilots and flight attendants oppose the deal and have been staging wildcat strikes for the last two weeks, forcing Alitalia to scrap more than 100 flights a day. The protesting workers, who have been calling in sick or strictly following procedures to cause delays, plan a full-blown strike for Tuesday. CAI is also seeking a foreign investor to become a minority shareholder, but company officials have said that a decision could wait until after the new airline was launched. They have been meeting with both Franco-Dutch carrier Air France-KLM and Germany's Lufthansa.

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