International Development News
Development News Edition

UPDATE 1-Italian state railways says will bid for Alitalia, other firms back off


Major companies on Tuesday ruled out involvement in a new rescue of Alitalia, complicating a plan led by Rome in which state-controlled railway Ferrovie dello Stato (FS) will bid for the airline and look to bring in partners.

Alitalia was put under special administration last year, leaving the government once again seeking a buyer to save the carrier. It will be the airline's third rescue in a decade.

FS said its board had decided to put in an offer to buy Alitalia, but gave no further details.

A source close to the deal had earlier told Reuters that FS's bid would only be a "transitional phase".

The source added the deal would be completed in two separate steps, with FS picking up Alitalia on set conditions and then, at a later stage, being joined by an Italian partner and a international one, from the airline sector.

The source said there was very little visibility on the next steps, and it was not clear which partners would join FS.

"The situation is very messy," the source said.

Earlier this month Deputy Prime Minister Luigi Di Maio suggested that state-controlled companies like oil major Eni , postal operator Poste and defence group Leonardo could all play a role in the relaunch.

Di Maio, also industry minister, said that there were many private investors also interested in Alitalia.

But on Tuesday Eni said that any suggestion that it might pick up a stake in the carrier was "groundless" and that it would not play a role in the rescue, a spokesperson said.

Leonardo too will not join any relaunch of Alitalia, which has already accumulated a loss of over 300 million euros ($340.86 million), a separate source close to the matter told Reuters.

"It would be crazy for Leonardo to enter this madness," the source said. Shares in the group were down almost 1.5 percent at 1600 GMT after Italian dailies had reported that the company would be involved in an effort spearheaded by FS.

Last month Poste Chief Executive Matteo del Fante said the group was "not at all interested" in joining an overhaul effort for the airline.

CASH DRAIN

Alitalia has cost Italian tax payers almost 10 billion euros over the last 20 years, more than the market capitalisation of Air France-KLM, Turkish Airlines, Norwegian Air, Finnair and SAS added together, according to Andrea Giuricin, CEO of transport advisory firm TRA Consulting.

Last year Alitalia accounted for only 8.5 percent of the international traffic to and from Italy, Giuricin added, just under a third of Ryanair's share.

The sale process was delayed due to the change of Italian government earlier this year, but the ruling coalition, that comprises the anti-establishment 5-Star Movement and the far-right League, pledged it would close a deal by Wednesday.

Germany's Lufthansa said earlier on Tuesday that it had no interest in participating in a government-led restructuring effort.

Alitalia must pay back the Italian state almost 1 billion euros in a bridge loan and related interest by mid-December. ($1 = 0.8801 euros) (Reporting by Giulia Segreti, additional reporting by Stephen Jewkes and Francesca Landini in Milan, Editing by Alexandra Hudson and Crispian Balmer)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....

With Ayodhya verdict, CJI starts clearing high profile pending cases

Ending all the speculations, the Chief Justice of India Mr. Ranjan Gogoi who is due to retire on November 17 decided to deliver the verdict in Ayodya dispute at 10.30 am on Saturday which is not a working day for the Supreme Court. This is ...

How partnerships and collaborations could enhance teacher training

Monica Malhotra Kandhari, Managing Director, MBD Group shares her views on public private partnership and collaborations in education sector. She supports her propositions with her organisations success stories....

Fixed Test centers would facelift level of WTC in India

The venues for the test matches in India should be fixed so that World Test Championship matches remain fair....

Videos

Latest News

Protesters set fire to hold off police at Hong Kong campus

Pro-democracy demonstrators holed up in a Hong Kong university campus set the main entrance ablaze Monday to prevent surrounding police moving in, after officers warned they may use live rounds if confronted by deadly weapons. The police wa...

Bolivia leader says elections will be called soon

Bolivias interim president said Sunday she will call new elections soon, as the country struggles with violent unrest a week after the resignation of Evo Morales. Very soon we will announce news regarding our main mandate calling transparen...

49ers rally by Cardinals behind Garoppolo's career day

San Francisco quarterback Jimmy Garoppolo passed for a career-high 424 yards and tied a career-high with four touchdowns, including the game-winning 25-yard score to Jeff Wilson Jr. with 31 seconds remaining, as the host 49ers rallied past ...

Carr lifts Raiders past Bengals for third straight win

Derek Carr threw one touchdown pass and ran for a second score Sunday afternoon as the Oakland Raiders used a strong defensive performance to hold off the visiting Cincinnati Bengals 17-10. Josh Jacobs rushed for 112 yards on 23 carries, an...

Give Feedback