Etihad agrees in principle to bail out Alitalia
By The Associated Press
June 25, 2014, Dubai, U.A.E. - Fast-growing Gulf airline Etihad Airways said Wednesday it had reached a deal in principle to buy a 49 per cent stake in struggling Italian carrier Alitalia, expanding its collection of foreign investments to one of Europe's most recognizable aviation brands.
By The Associated Press
Etihad is owned by the government of Abu Dhabi, the oil-rich capital
of the seven-state United Arab Emirates federation. It has been
expanding both by building its own route network and through a
rapid-fire series of investments in airlines from Europe to Australia.
In a joint statement, Etihad said it and
Alitalia "have agreed the principal terms and conditions of a proposed
transaction" for the near-half stake in the Italian flag carrier
following months of negotiation.
"The airlines will now
move to finalize the transactional documents, that will include the
agreed upon conditions, as soon as possible," the airline said.
The airlines did not disclose the
proposed terms of the accord, which they said remains subject to
regulatory approvals. European Union authorities will want to ensure any
deal doesn't violate competition rules.
Etihad already has stakes in a number of
European carriers, including Air Serbia, Ireland's Aer Lingus and
Germany's second largest airline, Air Berlin. It also is a partial owner
of Virgin Australia, Air Seychelles and India's Jet Airways.
Etihad is smaller than its Gulf competitor Qatar Airways and the region's largest carrier, Dubai-based Emirates.
Italian Transport Minister Maurizio Lupi
earlier this month told Italy's state RaiNews that Etihad's investment
could reach about 600 million euros ($816 million) and would revitalize
Rome's Fiumicino and Milan's Malpensa airports.
A successful deal would likely involve
banks renegotiating more than 500 million euros ($700 million) in debt,
cancelling some and converting the rest into shares, according to
Italian media reports.
Lupi issued a statement
Wednesday saying he and Italy's labour minister would set up a meeting
soon to discuss layoffs, which could face resistance by labour unions.
He also reported progress with banks in resolving the debt issue during a
meeting on Tuesday, but he did not provide details.
"It is ever more clear that this marriage
needs to go ahead, because it is by now evident to all that it involves
a big industrial investment with concrete prospects for our company,"