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Italy keen to keep 15% stake in Alitalia in rescue plan

Milan

ITALY is working on an Alitalia rescue plan that would see the state taking a stake of around 15 per cent in the carrier along with separate investments by state-owned firms such as Ferrovie dello Stato and a foreign player, business daily Il Sole 24 Ore said on Sunday.

Once a symbol of Italy's post-war economic boom that has recently struggled to compete with low-cost carriers and high speed trains, Alitalia was put under special administration last year after workers rejected a rescue plan.

As part of the administration process, Rome has been looking for a buyer for the airline, with a deadline set for Oct 31.

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It also granted Alitalia a bridge loan of 900 million euros (S$1.43 billion) to keep it afloat in the meantime.

According to the paper, once Alitalia has repaid the loan, the Treasury would reinvest part of that money in the carrier to retain a stake of about 14 to 15 per cent or it may choose to convert part of the loan into shares.

Alitalia has until Dec 15 to repay the bridge loan, although a source said on Saturday that the government was working on an extension of the deadline of up to six months.

As part of the government's two billion euro rescue plan, Italian railways group Ferrovie dello Stato (FS) would confer some assets to the airline that would then be converted into a stake, while state lender Cassa Depositi e Prestiti would help finance the acquisition of new aircraft, the paper added.

FS chief executive Gianfranco Battisti said last month that Alitalia could be an opportunity for the state-owned railways group, adding that he saw synergies in ticketing and routes.

To make the plan work, Italy still needs to strike a deal with a foreign rival willing to invest in Alitalia. That investor could take a stake of 20 to 30 per cent, the paper said.

Italy has been in talks with various players since Alitalia first went into administration.

EasyJet, Lufthansa and budget carrier Wizz Air submitted expressions of interest this year in at least parts of Alitalia.

On a trip to China last month, the government asked China's Silk Road Fund, Air China and China Eastern Airlines to consider buying a stake of up to 49 per cent in Alitalia but so far no commitment from that side has been made.

Separately, the Il Messaggero daily said that the government was planning to ask one of Alitalia's three commissioners, Luigi Gubitosi, to become the airline's new chief executive.

Alitalia declined to comment. A spokesman for the Industry Ministry said it was premature to discuss details of government plans for Alitalia, adding that more might be known next week.

Industry Minister Luigi Di Maio, who has promised to conclude the Alitalia case in November, has called a meeting with the airline's unions for Friday, Oct 12. REUTERS