PM Letta wants a state-backed firm to ease Alitalia merger- sources

October 8
8:58 AM 2013

Sources told Bloomberg that Italian Prime Minister Enrico Letta was reportedly pushing for a state-controlled firm to back Alitalia's planned merger with Air France- KLM Group or another international carrier. Letta was said to had been meeting with the management, bankers and investors of Alitalia for the second time in Rome to discuss the matter. Meanwhile, the board of directors of Alitalia was reportedly meeting later today to talk about the situation. The four people with knowledge of the matter spoke on the condition of anonymity since the discussions were private.

The people said Letta wanted to convince the current investors to boost the capital of Alitalia to make its financial standing more attractive to its potential partner. Two sources said should a capital increase would be carried out by Air France-KLM, the airline would stand to hold a 49% stake in Alitalia. Since 2009, Air France-KLM had owned a 25% share in Alitalia.

Alitalia had been looking for a capital injection of at least EUR 100 million before it would be able to combine with another carrier, the sources said.

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