Italy facing decision on sale of state-owned airline
The Italian government is facing a key decision regarding the planned sale of state-owned airline ITA, as bidding period for potential buyers expires at midnight on Monday, according to media reports
The Italian government is facing a key decision regarding the planned sale of state-owned airline ITA, as a bidding period for potential buyers expires at midnight on Monday, according to media reports.
Caretaker prime minister Mario Draghi has to decide by the end of this month whether the airline should be privatised, whether the privatisation should be postponed or whether the sale should not go forward at this time, dpa news agency quoted Italian daily "Corriere della Sera" as saying in a report on Sunday.
German flag carrier Lufthansa and shipping company MSC want to take a majority stake in ITA.
Lufthansa and MSC are launching a bid to buy over 80 per cent of ITA, the successor company to Alitalia. The Italian state is currently ITA's sole owner.
Alongside the Lufthansa/MSC bid, another is being made by US private equity fund Certares with Air France-KLM and Delta Air Lines.
ITA is valued at around 850 million euros ($853 million), the newspaper report said.
The two companies wanted to take over 80 per cent of the airline, meaning 20 per cent would remain in the possession of Italy's finance ministry.
Government sources say this is the preferred solution, according to Corriere della Sera.
However, the Ministry is demanding more money and a say, which is unlikely to go down well with the bidders.
According to the report, Certares only wants to take over 55 to 60 per cent of ITA and would therefore pay less.
The government does not consider direct entry by the US airline Delta Air Lines to be viable because it did not have access to ITAs' books, which were made available to the bidders in advance.
The only solution would be a new bidding process, which require the privatisation to be postponed, according to the report.
Draghi's list of options would also include doing nothing, the newspaper noted.
Government sources say this is problematic because ITA may have to ask the government for more money at the end of 2023. But that violates an agreement with the EU Commission in Brussels.
Draghi has dismissed fears that a delay approving the sale could jeopardize the deal, given Italy's political uncertainty as the country prepares to hold early elections on September 25.
"We have to do our duty until the end," Draghi said, adding that he didn't want to leave the decision for the next government.