Wednesday, 7 June 2017

ITALY: Alitalia To Be Taken By ‘highest bidder,’ No State Rescue

Italy’s center-left government said that Alitalia would be sold to the “highest bidder,” once again ruling out a state rescue as fears mounted that the troubled airline was plummeting toward bankruptcy.

Prime Minister Paolo Gentiloni said he had been disappointed by staff’s rejection of a rescue plan involving deep job and salary cuts, and reiterated that the state could not and would not step in.

The truth is what I said before the vote and what I say again today: The conditions are not there for Alitalia to be nationalized, he said.

Transport Minister Graziano Delrio meanwhile said the company would be “sold to the highest bidder” and the government made favorable noises about the mooted possibility of a partial takeover by Germany’s Lufthansa.

The loss-making national carrier’s future is up in the air after its workforce rejected a restructuring plan that management had presented as the only alternative to bankruptcy.

Etihad Airways, which owns a 49 percent stake in Alitalia, and other shareholders had made staff acceptance of the plan a precondition for their participation in a 2-billion-euro recapitalization plan involving a combination of loans and new shareholder financing.

But despite earlier proposals being watered down in negotiations with unions, over two-thirds of staff voted to reject them in a ballot Monday, in which more than 90 percent of employees took part.

The latest draft of the restructuring plan involves eliminating 1,700 jobs from a global headcount of 12,500, along with wage cuts of up to 8 percent for some of the remaining staff.

The company’s board Tuesday asked the government to either appoint administrators to find a purchaser or to organize the winding up of the company.

“The most plausible outcome is that we are moving to a brief period of extraordinary administration which could conclude in six months with a partial or total sale of Alitalia’s assets,” Economic Development Minister Carlo Calenda said.

Delrio, the transport minister, added that the business will be sold to the highest bidder but Alitalia has been weakened by the outcome of the ballot and its competitors will not give it any gifts.