Italy Facing Decision On Sale Of State-owned Airline

Italy faces a sale decision of the state-owned airline

Rome 22 August : The Italian government is awaiting a crucial decision on the planned sale of the state-owned airline ITA in the bid period to find buyers ends at midnight Monday night, as per media reports.
Prime minister in interim Mario Draghi has to decide by the end of this month if the airline should be privatized or not, and whether the privatisation process should be delayed or if the sale should be stopped at the moment, DPA news agency reported Italian daily “Corriere della Sera” as saying in an article on Sunday.

 Italy Facing Decision On Sale Of State-owned

German flag carrier Lufthansa and shipping company MSC are looking to acquire an entire share in ITA.

Lufthansa as well as MSC are planning to buy more than 80 percent of ITA which is the company that succeeded Alitalia.The Italian state is the sole owner of ITA.

As well as the Lufthansa/MSC bid, another one is being offered by US private equity fund Certares with Air France-KLM and Delta Air Lines.

ITA is estimated at around 850 million euros ($853 million) according to the newspaper reported.

The two companies wanted to acquire more than 80 percent of the airline, which would mean 20% of the airline would be in the control of Italy’s Finance Ministry.

Sources in the government indicate that this is the most preferred option according to Corriere della Sera.

However the Ministry is requesting an increase in funds and a voice that will not be a hit with those who bid.

Based on the study Certares only will take 55-60 percent of ITA and therefore pay less.

The government doesn’t think direct entry from Delta Air Lines, the US airline Delta Air Lines to be feasible since it was not able to gain access to ITAs books which were made available to prospective bidders in advance.

The only way to solve the issue is the creation of a new bidding system, which requires privatisation to be delayed as per the report.

The list of options also includes not doing anything according to the newspaper.

Sources from the government claim this is a problem because ITA might have to request more money by the close of 2023.However, this would violate the accord with the EU Commission in Brussels.

Draghi has ruled out the possibility that a delay in approving the sale could impede the sale due to Italy’s political instability in the midst of preparations for the first elections of September 25.

“We must perform our job until the endof the day,” Draghi declared in a statement, adding that he wanted to not put the decision up to the next government.

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