01/07/09, 23:11:57 UTC

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Alitalia shortlists six for second sale attempt

reuters.com

Alitalia has shortlisted European rivals Air France-KLM and Lufthansa along with three previous bidders and a new group for talks on investing in the airline, whose auction by the government flopped in July.

Smaller domestic airline Air One, Aeroflot and U.S. private equity firm TPG were among the six candidates picked by the Italian carrier even though they pulled out of the government auction.

Air France-KLM and Lufthansa spurned that sale but have since suggested there might be interest if conditions changed.

Alitalia also shortlisted a consortium advised by legal specialist Antonio Baldassarre which first contacted the airline in August.

Alitalia, which has a market capitalisation of around 1.13 billion euros ($1.59 billion), said in a statement that its board had decided to "carry out discussions to assess the interest" of the six possible suitors.

It said it hoped to complete such talks as soon as possible.

Alitalia's adviser, Citigroup, was given the task of contacting all potential bidders by the end of September as part of the carrier's renewed attempt to find a buyer for the government's controlling 49.9 percent stake.

A financial source told Reuters all options were still open on what kind of interest the shortlisted candidates might have, adding that parties were not talking specifics at the moment.

An Air France-KLM spokesman was not immediately available to comment. The airline, a long-time commercial partner of Alitalia, has previously said it would be willing to listen to any proposition Alitalia makes but would not do a deal unless it created value for the airline.

Italian daily Corriere della Sera reported on Monday that the Franco-Dutch airline had proposed a share swap for between 15 and 20 percent of Alitalia. After 2-3 years, if the situation at Alitalia improved, the Italian carrier would be merged into Air France-KLM.

Air France said it had no comment on that report.

A Lufthansa spokeswoman said after the shortlist was announced that a partnership with Alitalia must make sense for both sides, adding the German airline was basically open for possible talks.

There was no immediate comment from the other shortlisted potential suitors.

Pressure has grown on Italy's centre-left government to wrap up a sale of its stake quickly as the carrier continues to post losses and swelling debt. Alitalia has forecast a loss of just under 400 million euros for this year, excluding special items.

Alitalia's newly appointed chairman, Maurizio Prato, last month described the airline as "comatose" and bemoaned the "almost general state of denial" surrounding the airline.

He has warned that Alitalia will not be able to pay more than 1 billion euros in debt due over the next three years, raising doubts on whether the airline can survive over the long-term without a buyer.

 Printable Version  | published Oct 08, 2007