Italy govt to reduce Alitalia stake

ROME – The Italian government’s 62,4 per cent stake in the airline Alitalia must be reduced to below 51 per cent as soon as possible, Economy Minister Domenico Siniscalco told a parliamentary hearing yesterday.

After reaching an agreement with unions to cut jobs, the airline now has to implement its business plan, which calls for a recapitalisation and the company’s privatization, Siniscalco said. Privatisation has to be achieved “as soon as possible, as discussed with European (transport) commissioner Loyola de Palacio,” he added.He said the government had earmarked 750 million euros (N$6 billion) to take part in the airline’s re-capitalisation.Alitalia, struggling to stay aloft, last month said it had to carry out a capital increase by March to finance 1,2 billion euros in planned investments, repay a 0,7-billion-euro convertible bond expiring in 2007 and strengthen its balance sheet.The airline, which is carrying a debt of 1,6 billion euros, also said the Italian government would retain a stake of at least 30 per cent after the capital increase.Alitalia management joined union and government officials in forging a deal early on Wednesday to save the flag carrier, but its restructuring plan immediately came under fire from rival airlines who complained of illegal state aid.-Nampa-AFPPrivatisation has to be achieved “as soon as possible, as discussed with European (transport) commissioner Loyola de Palacio,” he added.He said the government had earmarked 750 million euros (N$6 billion) to take part in the airline’s re-capitalisation.Alitalia, struggling to stay aloft, last month said it had to carry out a capital increase by March to finance 1,2 billion euros in planned investments, repay a 0,7-billion-euro convertible bond expiring in 2007 and strengthen its balance sheet.The airline, which is carrying a debt of 1,6 billion euros, also said the Italian government would retain a stake of at least 30 per cent after the capital increase.Alitalia management joined union and government officials in forging a deal early on Wednesday to save the flag carrier, but its restructuring plan immediately came under fire from rival airlines who complained of illegal state aid. -Nampa-AFP