Alitalia said late Monday it’ll pursue preliminary takeover talks with six parties including Air France-KLM Group, Deutsche Lufthansa and private-equity firm TPG as the government proceeds with efforts to sell the loss-making carrier.
The remaining interested investors in Italy’s national airline include domestic low-cost rival Air One, Russia’s OAO Aeroflot and a group represented by Italian lawyer Antonia Baldassare, Alitalia said in a statement. On Tuesday Alitalia said the shareholders in the Baldassare consortium include Safna, Engineering SpA, Aermar Srl, Mivtach Shamir H. Ltd, I Viaggi del Ventaglio SpA and Reficere Srl.
The Italian government has been trying to sell its 49.9% stake in Alitalia for the past eight months. The airline, which is losing at least €1 million a day, initially attracted a flurry of buyers, including some of the parties that declared an interest again on Tuesday, but they dropped out one by one over the summer citing restrictive conditions imposed by the government and a lack of access to its books. (see full story). Chairman Maurizio Patro last month told Italian newspaper Il Sole 24 in an interview that Alitalia intended to get in touch again with all the parties that had shown an interest in the initial auction. The list published late Monday is the result of the renewed contacts.
Air France-KLM and Deutsche Lufthansa, Europe’s first- and second-largest airlines, are involved in the bid process for the first time. OAO Aeroflot, Air One and TGP (formerly known as Texas Pacific), had quit the earlier auction. Prato briefed the airline’s board on the takeover options Monday. The airline is seeking to complete the sale “in the shortest possible timeframe.” Shares of Alitalia have declined 22% so far this year. They were last up 3.2% in Milan morning trading. Air France-KLM shares slipped 0.5% in Paris. Lufthansa shares inched 0.3% higher in Frankfurt.
The statement published late Monday didn’t specify whether the government had dropped some of the conditions that caused the auction to collapse the first time around in order to woo back suitors. These conditions included maintaining certain staff levels, continued operation of some routes and traffic rights regardless of profitability, preserving Alitalia’s identity, and not selling certain Alitalia interests for three years. Last month Prato unveiled a survival plan under which Alitalia would reduce its international hub activities at Milan’s Malpensa airport while expanding its low-cost and cargo operations there. The plan drew a sharp outcry from local politicians and officials.
As part of the plan, Alitalia said it aims to carry 28.7 million passengers in 2010, up from the 25.5 million expected this year. It targets earnings before interest, tax, depreciation, amortization and rental costs of 11% in 2010 compared with the 2.6% achieved in 2006. Alitalia lost €211.1 million ($296.3 million) in the H1 of the year, and a total of €625.6 million last year. (marketwatch.com)