Etihad Airways reaches agreement to take stake in Alitalia. In the meanwhile Fiumicino airport is in chaos

Etihad Airways reaches agreement to take stake in Alitalia. Rome, Italy: Etihad Airways is injecting €560 million (Dh2.7 billion) and taking a 49 per cent stake Italy’s debt ridden national carrier Alitalia after 12 months of negotiations.

The agreement between Alitalia and Etihad Airways, finalised in Rome on Friday, gives Etihad access to Europe’s fourth-largest travel market.Etihad is spending €387.5 million on the equity stake, €60 million on buying five London Heathrow slots off Alitalia and a further €112.5 million to acquire 75 per cent of Alitalia’s MileMiglia loyalty programme. The Heathrow slots will be leased back to Alitalia. The transaction is due to be completed on December 31, 2014.

Talks between the two airlines started last year but stalled due to disagreements over restructuring Alitalia’s nearly €1 billion debt and job cuts. Alitalia was bailed out last year by a €500 million government engineered rescue package.

The Italian airline had earlier tried to secure more capital from Air France-KLM, a shareholder, but a disagreement over debt restructuring led to the French-Dutch group allowing its 25 per cent stake to be diluted to 7 per cent.

We’ve put together a three-year plan to put the airline back to profitability

said James Hogan, Etihad Airways President and chief executive, in Rome on Friday during a press conference with Roberto Colaninno, chairman of Italian flag carrier Alitalia and Alitalia CEO Gabriele del Torchio. Alitalia has been thrown a financial lifeline by Etihad Airways as the agreement, which follows several months of negotiations, will make the state-controlled Gulf airline the biggest single shareholder in the loss-making Italian carrier.

Etihad has successfully negotiated for more than half a billion euros in debt to be restructured off while foundation shareholders have committed €300 million in equity and Italian institutions extended €300 million in new loan facilities.

Foundation shareholders include Italian government owned Poste Italiane, who is putting up €75 million, and Italy’s two biggest banks San Pailo and UniCredit, who are putting up €88 million and €63.5 million, respectively. Atlantia, IMMSI, Pirelli and Gavo are putting up the rest.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>