Troubled Italian carrier Alitalia will have to decide whether to relaunch via a bankruptcy filing or pursue another option when its board meets on Saturday, as its third attempt at finding a buyer sputters to a close.
Alitalia is still flying thanks to an emergency government loan after a planned sale to Air France-KLM fell apart earlier this year, but an oil price surge and a sharp fall in bookings have compounded its long list of troubles.
Prime Minister Silvio Berlusconi said on Friday that news agency reports the government was planning to put the company into extraordinary administration, a way of protecting it from creditors, were "totally groundless."
The airline loses more than EUR2 million euros a day, and was worth just under USD$1 billion on the market before its shares were suspended in June after Italy relaunched the sale process.
Latest figures showed the airline's passenger traffic fell 22 percent in May as it cut capacity and travelers fretted about its uncertain future.
Alitalia's board will meet on Saturday, when Chairman Aristide Police will ask its controlling shareholder -- the Italian Treasury -- to declare whether the airline should remain in business, a political source said.
"The chairman will ask the Treasury representative to reconfirm the existence of conditions for continuing business or he'll act accordingly and file for bankruptcy," the source said.
Berlusconi promised earlier on Friday that Italy was close to resolving Alitalia's fate.
"I'm working on it... For now, we have two things: the necessary capital and the slogan 'I love Italy, I fly Alitalia'," he said.
The government, which owns a 49.9 percent stake in Alitalia, appears to be in favor of avoiding the bankruptcy option, political and union sources say, despite a widely reported rescue plan by adviser Intesa Sanpaolo that would require it.
Those sources say the government has agreed to give turnaround expert Rocco Sabelli the power to carry out Intesa's plan, but without pursuing bankruptcy, and one union source said the decision could be announced as early as next week.
Under Intesa's plan, a bankruptcy filing would be followed by splitting off the airline's healthy units in which investors could put in up to EUR800 million, Italian media say.
That plan, however, would not be legal unless the government modified Italian bankruptcy law -- a move that development minister Claudia Scajola does not rule out. Intesa and Alitalia would not confirm the plan.
Smaller Italian airline Air One's chief Carlo Toto -- who has long sought to buy Alitalia but was rejected in favor of Air France-KLM, has confirmed his willingness to be part of the investor group, a source familiar with the discussions said.
Italian media have speculated other investors could include wealthy Italian business families like the Benettons and Fossatis and private equity firm Clessidra.
This is the third attempt by the Italian government to sell Alitalia in less than 20 months. An initial auction for the government's stake fell apart last year when all bidders pulled out, while unions scuppered the sale to Air France-KLM.
(Reuters)
Source: http://news.airwise.com/story/view/1217025814.html