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Old January 30th, 2007, 04:18 PM   #121
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Alitalia sale attracts 11 potential bidders
By Adrian Michaels in Milan and Tony Barber in Rome

Published: January 29 2007 21:47 | Last updated: January 29 2007 21:47

Initial interest in the sale of Alitalia far exceeded expectations with 11 groups saying they could go on to bid for the stricken airline before the deadline on Monday night.

The Italian government, which is selling the majority of its controlling stake as the first step in an attempted rescue of Alitalia, said it would review the “manifestations of interest” in the next few days.

1. AP Holding S.p.a. (amministratore unico Carlo Toto) - Air One

2. Benstar-Saturn Enterprises, Ltd

3. Fabio Scaccia (persona fisica)

4. Management & Capitali S.p.a. - Cerberus European Investments, LLC - ELQ Investors, Ltd - Lefinalc S.p.a. (Alcide Leali)

5. MatlinPatterson Global Advisers, LLC

6. Net Present Value S.p.a.

7. Porcellana Castello S.p.a. - Capper-NO S.p.a.

8. Terra Firma Investments (GP) 3, Ltd

9. Texas Pacific Group Europe, LLP

10. Unicredit Banca Mobiliare S.p.a.

11. Wonders & Dreams UK, Ltd (Paolo Alazraki)


Air One, the Italian airline, is on the list and the rest are mainly financial groups. Although the number of bidders outstripped forecasts, the initial expressions of interest are a long way from maturing into bids.

Many of the people involved have privately said that the government would have to give them a free hand in restructuring Alitalia, which said at the weekend that it expected a loss of €380m for 2006 – exceeding forecasts and highlighting how difficult a turnround would be.

The government wants the Italian nature of the company preserved along with domestic routes and jobs, though it has signalled a willingness to be flexible on staffing. A sticking point is the need to maintain hubs in Rome and Milan.

Paolo Alazraki, the Italian businessman who is one of the bidders, said: “Pilots, hostesses and the other employees are the only good thing about Alitalia. The rest of it can be thrown away.”

Air France said in a note on Monday that it had not presented a bid and that the conditions were not suitable. It said it would continue to develop its commercial relationship with Alitalia, in which it has a 2 per cent stake.

The bidders along with Air One and Mr Alazraki are: Benstar-Saturn Enterprises; Fabio Scaccia; a group led by Management & Capitali; MatlinPatterson Global Advisers; Net Present Value; Porcellana Castello; Terra Firma Investments; Texas Pacific Group; and Unicredit Banca Mobiliare.

FT.com
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Old January 31st, 2007, 11:29 AM   #122
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January 31, 2007
Italy: Teacher Makes a Playful Offer for Alitalia
By REUTERS

A high school aviation teacher earning 1,200 euros ($1,500) a month became a celebrity by making a fake bid to buy Alitalia as a protest against years of mismanagement.

“This was a provocation. It was my way of making a citizen’s protest,” said the teacher, Fabio Scaccia, who teaches aerodynamics and aircraft design in the city of Frosinone, just south of Rome.

When the treasury ministry, which is auctioning a stake in the airline, announced 11 expressions of interest on Monday night, journalists were stumped by the third entry: “Fabio Scaccia (individual).” He said no one had checked into his credentials, even though the treasury has said bidders must have assets of at least 100 million euros.

So the professor found his name alongside the private equity powerhouse Texas Pacific Group and the No. 2 bank in Italy, UniCredit, on the list. “I make 1,200 euros a month as a teacher, and I think I could run Alitalia for the same salary,” he said.

Alitalia’s chief executive, Giancarlo Cimoli, makes about 225,000 euros ($291,000) each month.
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Old February 10th, 2007, 02:45 PM   #123
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Friday February 9, 7:52 PM
Alitalia to jettison chief executive

ROME (AFP) - The Italian government plans to sack the head of Italy's struggling airline Alitalia, Giancarlo Cimoli, at the next meeting of shareholders on February 22.

The government, which began moves to privatise the airline in December, is the company's largest stakeholder with 49.9 percent of its capital.

A short list of three leading candidates to replace Cimoli may be published later Friday, the financial daily Il Sole 24 Ore reported Friday.

The board of directors was automatically dissolved on January 17 when one of its three members, Air France-KLM CEO Jean-Cyril Spinetta, resigned from the panel.

Cimoli, who has headed the loss-making airline since May 2004 and who is bitterly opposed by the unions, is blamed for last year's loss estimated at more than 380 million euros (490 million dollars).

The economy ministry would not immediately comment on Friday's report.

The decision to replace Cimoli would come as the ministry prepares to announce a list of candiates submitting exploratory bids to acquire the airline.

Four to six of the 11 bidders are considered in the running for the second phase of the process, according to the Italian press.

They include the Italian management fund Management and Capitali, created by industrialist Carlo de Benedetti; the US fund Texas Pacific Group (TPG); Italy's Unicredit bank and the holding company of Italian airline Air One founder Carlo Toto.

M and C specialises in turning failing companies around, while TPG rescued the US airline Continental and is bidding to acquire Australia's Qantas.
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Old February 14th, 2007, 05:16 AM   #124
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Ministry says five potential bidders have made the cut for ailing Alitalia
13 February 2007

ROME (AP) - Five potential bidders, among them the holding company led by the chairman of rival AirOne airline, have made the cut in the evaluation for a possible buyer for Alitalia SpA., the Economy Ministry said Tuesday.

The ministry, which is the biggest shareholder with control of a 49.9 percent share of Alitalia, said the five have until mid-April to present nonbinding offers.

Besides AP Holding SpA, which is led by Carlo Toto, chairman of AirOne, others that will be considered are private equity fund Texas Pacific Group; Italian banking group UniCredit SpA; Carlo De Benedetti's private equity fund Management & Capital, Cerberus European Investments, LLC, ELQ Investors Ltd. and Lefinalc SpA; and MatlinPatterson Global Advisers, LLC, the ministry said in a statement.

The list was whittled down from 11 private investors originally expressing interest.

The government announced in December conditions for the sale of at least 30.1 percent of the airline to a buyer with a turnaround plan.

The airline said last month it expects operating losses of about €380 million (US$490 million) for 2006. It has blamed strong competition from low-cost airlines, higher fuel costs and several strikes by employees that grounded flights.
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Old February 27th, 2007, 04:04 AM   #125
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Italy to keep maximum 10 percent stake in Alitalia after sale
23 February 2007

MILAN, Italy (AP) - The Italian Treasury said Friday it will retain a maximum stake of 10 percent in state-controlled Alitalia SpA, setting out conditions for the next round of bidding in the sale of the unprofitable airline.

Bids for 49.9 percent of state-owned Alitalia from a previously selected shortlist of contenders must be handed in by April 16, the treasury said in a statement.

The details for the next round of bidding come as the treasury seeks to keep the sale of the struggling carrier on track, despite an ongoing political crisis in Italy.

Premier Romano Prodi resigned earlier this week amid wrangling over foreign policy within his center-left coalition. Talks were under way Friday on forming a new government.

The government announced conditions in December for the sale of at least a 30.1 percent stake in the airline to a buyer with a turnaround plan.

Under terms set out Friday, bidders must guarantee Alitalia will "retain an Italian identity" for at least eight years. They also must set out terms of a business plan designed to turn the airline around and explain their staffing plans.

The five bidders include the holding company led by the chairman of rival AirOne airline, private equity fund Texas Pacific Group; Italian banking group UniCredit SPA; Carlo De Benedetti's private equity fund Management & Capital, Cerberus European Investments, LLC, ELQ Investors Ltd. and Lefinalc SPA; and MatlinPatterson Global Advisers, LLC.

Alitalia said last month it expected operating losses of about €380 million (US$490 million) for 2006. It has blamed strong competition from low-cost airlines, higher fuel costs and strikes by employees that grounded flights.
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Old February 28th, 2007, 08:39 AM   #126
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Alitalia board says industrial plan unchanged

ROME, Feb 27 (Reuters) - Alitalia said on Tuesday its newly appointed board had begun to examine the airline's financial accounts but had yet to approve them, and has decided not to change the airline's industrial plan for now.

The board, with new chairman, Berardino Libonati, at the helm, set a meeting for March 9 to continue discussing the airline's financial condition.

Italian newspapers have reported that the board's first step may be to write down the value of the airline's fleet by 400 million euros.
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Old April 11th, 2007, 12:47 PM   #127
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Saturday April 7, 12:27 AM
Aeroflot, Air France-KLM to mull joint Alitalia bid: report

MOSCOW (AFP) - The Russian airline Aeroflot is reportedly to hold talks next week with Air France-KLM on a possible joint bid for the troubled Italian carrier Alitalia.

The Vedomosti newspaper quoted a source close to Aeroflot as adding that negotiations could nonetheless be complicated owing to Alitalia's accumulated debt of one billion euros (1.34 billion dollars).

The Russian airline declined to comment on the report.

Aeroflot surprised the airline sector last week by announcing that it would head a group in bidding for Alitalia, in which the Italian government plans to sell a stake of at least 39.9 percent.

The state currently owns 49.9 percent of the Italian airline, and any buyer of 39.9 percent would be obliged to make an offer for the rest.

Air France-KLM and Alitalia each own 2.0 percent of each other's capital, and all four airlines belong to the Skyteam alliance.

The Franco-Dutch carrier has repeatedly been the subject of rumours concerning an Alitalia takeover, despite its repeated denials.

An Air France spokeswoman said that the companies had not discussed the idea of a joint bid.

"Air France has not been informed of Aeroflot's plans as regards Alitalia and has not discussed it with the Russian air company," she told AFP.

Bidders for the government's shares in Alitalia have until April 16 to present preliminary offers, including business plans for the Italian airline.
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Old April 18th, 2007, 08:55 AM   #128
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Italian government confirms three preliminary offers received for ailing Alitalia
16 April 2007

ROME (AP) - The Italian government on Monday confirmed the receipt of three preliminary offers to take over struggling airline Alitalia.

The three bidders were required to submit offers for a minimum 39.9 percent state in the airline as well as plans to return the Italian flagship carrier to profitability.

The Economics Ministry said in a statement after the closing of the stock market that it would review bids along with its financial adviser, and noted that the bidders' plans could be modified before the offers become binding.

The bidders are: Italy's Unicredit SpA and Russian airline Aeroflot; New York-based asset management group Matlin Patterson Global Advisers LLC and Texas Pacific Group pooling their bid with Italian investment bank Mediobanca; and AP Holding SpA, led by Carlo Toto, chairman of Air One.

Italy, which has a 49.9 percent share of Alitalia, intends to sell at least a 39.9 percent share to a buyer with a turnaround plan. Under the latest terms outlined by the government, bidders must guarantee Alitalia will retain an Italian identity for at least eight years and set out terms of a business plan to turn around the airline.

The government wants to complete the privatization by the end of June.

Alitalia shares closed up at 2.6 percent, at euro1.04 (US$1.41), on the Milan stock exchange.
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Old April 28th, 2007, 05:36 AM   #129
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Alitalia to cancel 356 flights next week due to flight attendants strike
27 April 2007

ROME (AP) - A one-day strike by flight attendants at Italy's Alitalia will likely disrupt the travel plans of more than 30,000 passengers on Thursday, the airline said.

The airline will cancel 356 flights, Alitalia said.

About half of the day's scheduled flights were to be scrapped, including 202 domestic and 154 international flights, Alitalia said in a statement Friday.

The company did not give details on the routes affected.

Flight attendants at Alitalia are in contract renewal negotiations. The ailing flagship Italian airline, which reported widening pretax losses in 2006, has been battered by a series of strikes as well as high fuel costs and low-cost competition.
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Old May 14th, 2007, 12:33 PM   #130
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Worst airline

We flew with Alitalia , Palemro-Milano-Stockholm and....never again.

It was like a comedy, Fawlty Towers

Dirty, cabin and wc, rude staff, no shopping onboard cause computer didnt work....

It was like traveling in a subway during the rush hour...

Worst ever
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Old May 16th, 2007, 08:55 AM   #131
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Alitalia quarterly loss narrows, market fears low bids

ROME, May 15 (Reuters) - Italian airline Alitalia said on Tuesday its loss narrowed slightly in the first quarter due to fewer strikes but warned it could be forced to write down the value of its aircraft fleet.

The earnings report was released after Alitalia's shares touched a two-week low on concern that bids submitted in an auction for its privatisation were well below market price.

The government has shortlisted three bidders for its controlling stake in the airline after years of failed attempts by the state to turn Alitalia into a profitable company.

The airline's operating loss narrowed to 107 million euros in the quarter from 129 million a year earlier when labour strikes weighed more heavily on results.

Revenue rose more than 7 percent to 1.06 billion euros, helped by the inclusion of smaller airline Volare and with both passenger and cargo businesses showing growth.

With pre-tax profit of 147 million euros, the airline said its 2007 operating result could improve from a year earlier.

But Alitalia said it was analysing the accounting value of its fleet, and a writedown could force it to reduce results for 2006, when it reported an operating loss of 266 million euros.

A writedown could reignite concerns that the government will need to pump more money into the airline.

HEAVY TRADING

Alitalia's shares closed down 4.4 percent at 0.895 euros after a newspaper reported that the highest preliminary bid submitted for the airline was less than half its current market price. At one point shares dipped as much as 5.8 percent.

Without citing sources, the financial newspaper MF said Russian airline Aeroflot had offered less than 0.40 euros per share, while Italian carrier Air One had bid 0.10 euros per share.

A U.S. private equity consortium led by Texas Pacific Group [TPG.UL] had bid zero euros per share but had offered to buy the airline's 2002-2010 convertible bonds, it said.

The government has said that a buyer will be chosen on the basis of the plans to turn the airline around rather than on price.

On Monday, all three shortlisted bidders were admitted to the next round after an assessment of their preliminary offers.

Italian minister Antonio Di Pietro later said he had personally examined two of those three offers, describing them as "highly competitive but in need of improvement."

Alitalia also had to cancel some flights and delay others after its flight attendants began to "follow their contract to the letter," preventing them from working extra time.

"I would define it as a cold battle," said Cristina Ricci, an Alitalia cabin attendant who refused to work extra hours requested by the airline. "From today, we have stopped going out of our way to meet the needs of the company."

Dealing with Alitalia's notoriously tough labour unions will be a major challenge for a new buyer.
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Old May 18th, 2007, 05:46 AM   #132
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Alitalia Cargo announces new route to Miami
16 May 2007

MILAN, Italy (AP) - Alitalia Cargo announced Wednesday a new trans-Atlantic route from Milan to Miami that will also serve at least seven South American countries through an agreement with Centurion Air Cargo.

Alitalia Cargo will start weekly services to Miami on May 18, boosting to 10 its weekly flights to the United States, the company said in a statement.

The agreement with Centurion will allow Alitalia customers to reach key South American markets, including Venezuela, Ecuador, Brazil, Chile, Argentina and Peru, the company said.

"This agreement will allow us to reinforce our business, and project ourselves toward Central and South America," Alitalia Cargo Chief Executive Pierandrea Galli said in a statement. "Miami will become an important hub for handling goods, granting Italian entrepreneurs the ability to develop trade with key markets."

Alitalia Cargo operates a fleet of 5 MD11 Special Freighters. In addition to its North American routes, it serves India, China and Africa, and through agreements with Nippon Cargo and Korean Air, reaches Japan and South Korea.
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Old May 19th, 2007, 05:57 AM   #133
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Aeroflot seeks up to $1.2 bln for Alitalia - paper

MOSCOW, May 18 (Reuters) - Russian airline Aeroflot is seeking up to $1.2 billion in loans from western banks to fund its purchase of 39.9 percent of Italy's Alitalia , Russia's Vedomosti newspaper said on Friday.

It quoted Mikhail Poluboyarinov, the Russian flag carrier's finance director, as saying Aeroflot had sent letters to 20 foreign banks, including Deutsche Bank, Citigroup, Commerzbank, ABN AMRO, Credit Suisse, BNP Paribas, Calyon, Royal Bank of Scotland and Unicredit , Aeroflot's bidding partner.

Vedomosti quoted a source involved in the talks with banks as saying that it hoped to borrow 500-900 million euros ($676 million-$1.2 billion).

Poluboyarinov declined to name the amount but said it would be an unsecured, one-year loan and the airline expected answers from the banks by the end of May.

Apart from Aeroflot, the bidders for the Alitalia stake are a U.S. private equity consortium led by Texas Pacific Group and smaller Italian carrier Air One.
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Old May 21st, 2007, 04:48 PM   #134
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Alitalia cancels flights as cabin crew strike

ROME, May 20, 2007 (AFP) - Italy's Alitalia airline cancelled 14 flights Sunday from Rome's Fiumicino airport, including 11 to international destinations, because of a strike by cabin crew, a media report said.

Affected passengers were being found seats aboard other companies' aircraft, the Telenews agency, which specialises in airport-related news, reported.

Strike action by Alitalia cabin crew, following a breakdown in talks on a new labour contract, forced the company to cancel 19 flights Saturday from Rome airport.

Alitalia is expected to have to cancel 394 flights Tuesday, more than half of them to international destinations, because of a strike by air controllers over a pay dispute, the company announced Saturday.

Alitalia has been plagued by financial difficulties and the Italian government has announced the sale of its 49.9 percent stake in the company, scheduled for the end of July.
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Old May 23rd, 2007, 07:18 AM   #135
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Strikes hit Alitalia as Italy looks for exit

ROME, May 22 (Reuters) - Twin strikes stranded thousands of Alitalia passengers on Tuesday as the Italian government said it was willing to quit the state-controlled airline entirely by selling its whole 49.9 percent stake.

Strikes by air traffic controllers and Alitalia cabin crew caused chaos affecting other airlines and requiring special measures to ensure up to 7,000 fans of soccer club AC Milan could travel to Wednesday's Champions League final in Athens.

The stoppages came as the Italian state sent a letter to its three shortlisted bidders for Alitalia, including a U.S. private equity group that is also gunning for Spain's Iberia.

It told them it wanted binding, cash offers for Alitalia by July 2. The Italian government said the bidder for a 39.9 percent stake could, if it wanted, buy the remaining 10 percent of the state's stake as well.

The idea could appeal to buyers looking to keep Alitalia free from political meddling, but unions said Italy should reconsider completely exiting the flag carrier.

"It would be better if the Treasury guarantees its presence in Alitalia," said Raffaele Bonanni, the leader of Italy's second largest trade union confederation, CISL.

Alitalia, Europe's fifth-largest airline, is losing over 1 million euros ($1.4 million) a day as strikes and high fuel costs weigh. It has not posted an operating profit since 1998, despite several restructuring efforts.

The Italian state has told bidders their turnaround plans for Alitalia were more important than the offer prices, and let employees know the government is ready to help ease the pain from any job cuts.

ANGRY SOCCER FANS

The bidders include Russia's Aeroflot and Alitalia's closest domestic rival, Air One. The third bidding consortium includes Texas Pacific Group, which is also bidding for Iberia.

Whoever buys Alitalia will inherit its notoriously strike-prone unions, who have already forced the airline to cancel hundreds of flights this month.

On Tuesday, a protest by cabin crews coincided with a air traffic controllers' strike in campaigns seeking better pay and conditions. Nearly 400 Alitalia flights were cancelled, or about half of the carrier's daily traffic.

The strikes had threatened to stop soccer fans travelling to Athens for the Champions League final against Liverpool, but civil aviation authorities said these flights had been "guaranteed" to avoid any threat of disturbances.

Meanwhile, the air traffic controllers' strike created travel headaches for others as well. German airline Deutsche Lufthansa expected major disruption to Italian flights and cancelled 42 return flights affecting thousands of passengers.

German budget carrier Air Berlin also expected to cancel some flights.

Some stranded travellers had less-than-noble gripes, including one man from Naples who complained his cancelled Brussels flight could expose his affair with another woman.

"My girlfriend thinks I am still in Belgium but I have come back to Italy because I have a lover here. She is expecting to meet me tonight," said the traveller, who asked not to be named.

"I don't know what I am going to do. This is what happens when you tell lies." (Additional reporting by Catherine Hornby in Frankfurt and Robin Pomeroy in Rome)
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Old May 23rd, 2007, 08:30 PM   #136
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That sucks. At least they have beautiful flight attendants.
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Old May 25th, 2007, 06:52 PM   #137
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Alitalia hits new turbulence with 'work-to-rule' action

ROME, May 25, 2007 (AFP) - Italy's struggling flagship airline Alitalia hit new turbulence Friday as cabin crews staged a "work-to-rule" action leading to several flight cancellations, according to a union spokesman.

The action came after the debt-ridden airline was forced to ground nearly 400 flights on Tuesday, when air traffic controllers were also on strike, sparking dozens more cancellations by other airlines.

"We don't know the exact numbers" of flights cancelled Friday as a result of sticking strictly to company rules regarding working hours and crew composition, union spokesman Francesco Staccioli told AFP.

A news agency specialising in airport affairs, Telenews, said some 20 flights were affected at Rome's Fiumicino airport, including flights to Paris and Moscow, while the rest were domestic flights between Rome and the northern city of Milan.

Alitalia cabin crew have staged a series of strikes since talks on a new labour contract broke down in April.

The Italian government, which wants to sell its 49.9 percent stake in Alitalia and has set a July 2 deadline for bids, has called a meeting with the airline's management and union leaders on Tuesday in a bid to resolve the dispute.

The Italian flagship lost some 380 million euros (490 million dollars) last year.

Lack of room for manoeuvre in restructuring the carrier in the face of strong unions ever prepared to stage crippling strikes is a major liability facing an eventual buyer, analysts believe.

Three main bidders have emerged, including Russian airline Aeroflot, a consortium of private equity groups and the owner of Italian airline Air One.

The cost of taking over Alitalia is estimated at about three billion euros, counting its current stock market capitalisation of 1.5 billion plus its debt of one billion and the cost of renewing its ageing fleet of 183 aircraft.
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Old May 25th, 2007, 06:56 PM   #138
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Quote:
Originally Posted by FM 2258 View Post


That sucks. At least they have beautiful flight attendants.
lol...

I really hope that Texas Pacific Group will win the bid.
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Old June 19th, 2007, 05:24 AM   #139
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Alitalia auction stumbles as finale looms

ROME, June 18 (Reuters) - Alitalia's auction risks fizzling out altogether as it enters the final stretch, leaving the Italian government with the bleak prospect of pumping more cash into the unprofitable airline to keep it flying.

Put up for sale by Rome amid much fanfare six months ago in an effort to turn it around, Alitalia's auction initially attracted 11 bidders before the list was whittled down to three.

One of them has since pulled out, and on Monday speculation grew that Aeroflot might be the next to depart after it complained about the price tag. The Russian airline denies any plans to quit.

Analysts also question the wisdom of potentially selling Alitalia to a state-controlled airline such as Aeroflot when the aim has been to privatise it.

All of that would leave just one bidder in the fray -- smaller Italian carrier Air One, whose annual revenues barely match up to the annual losses of its larger rival.

The deadline to submit binding offers for Alitalia, worth about $1.3 billion on the market, is just two weeks away.

"I'm very doubtful about whether we'll get to the end of this," said Giacomo Chiorino, who heads fund management company Nuovi Investimenti Sim.

"I don't think we're going to sell our state airline to Russia. And (Air One) seem to have doubts themselves on buying something so big and with so many problems."

STARTED BADLY, ENDING WORSE?

Criticism of the auction from Italian politicians came thick and fast after Interfax on Monday cited sources saying that Aeroflot was pulling out, which the airline denied.

Italian senator Dino Tibaldi said the news was deeply worrying for the auction while another lawmaker said Rome should start from scratch with a new auction if Aeroflot did pull out.

"I hope that the government would have enough sense of reality to understand that, if ... the news of this morning is confirmed, it can't proceed as if nothing happened," Daniele Capezzone, who heads the parliamentary commission on productive activity, told ANSA.

Alitalia itself last week obliquely referred to what might happen if its auction failed, noting that it knew of no plans by any investors to shut the airline down in such a case.

But it said its operational continuity depended on the outcome of the sale.

As the auction sputters along, the airline's woes have multiplied. It keeps posting losses and it wrote down the value of its fleet last month, triggering the need for a capital increase under Italian law.

If Alitalia is not able to find a buyer, then the Italian government may end up having to foot the bill once again for the airline's next cash injection, said Chiorino.

"If the auction doesn't go to the end, it's going to be a huge problem because the government doesn't seem to be ready to intervene once again," he said. "Public opinion is against them... Most people in Italy are against the state putting more money into it."

And through it all, Alitalia's unions have staged crippling strikes and there was more criticism on the auction from one union chief on Monday.

"Alitalia's privatisation started badly and is ending in the worst fashion," said Claudio Genovesi, head of the powerful Fit-Cisl union. "The government has to assume the responsibility of direct negotiations as was done by the respective governments of Air France and KLM to safeguard their sector."
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Old June 19th, 2007, 05:26 AM   #140
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FACTBOX-Alitalia's spluttering bid process

June 18 (Reuters) - Italy's sale of airline Alitalia looks increasingly fragile after Russian suitor Aeroflot said on Monday a purchase would depend on price, although denying a report from Interfax that it was actually pulling out.

The treasury, which is being advised by Merrill Lynch and Bain on the sale, asked Credit Suisse last week to make an independent valuation of the airline -- worth about 1.06 billion euros ($1.4 billion) on the market -- and told management to put together plans for the next three years.

That has led to speculation the auction might fail, given the choice of bidders is now between Air One, a domestic airline whose revenues scarcely match Alitalia's losses, and another state-owned airline.

Following are details of the bid process, Alitalia and its suitors, who must submit binding offers by July 2:

THE BID PROCESS

The government announced it was putting its stake in Alitalia up for sale in late December, 2006.

Rome owns 49.9 percent of the flagship carrier and is seeking bids for at least 39.9 percent, which would automatically trigger a full bid under Italian takeover law. It has said it is willing to sell the entire stake if a bidder wants it.

There were 11 bidders initially but those shrank to three approved to submit binding offers.

Private equity firms TPG [TPG.UL] and MatlinPatterson pulled out at the end of May citing difficulties with the rules.

TPG has bid instead with British Airways for Iberia , valuing the Spanish carrier at 3.4 billion euros.

ALITALIA

Italy's national carrier has lost nearly a quarter of its value since the government announced its privatisation on Dec. 29, 2006, and its market worth now barely exceeds its debt, which was 995 million euros at the end of March.

The airline has posted an annual operating loss every year since 1999 and in the first quarter of 2007 lost 91 million euros -- around a million euros a day.

It had to write down the value of its fleet by 197 million euros, and this pushed losses in 2006 to 626 million euros -- almost certainly forcing it to launch a capital increase to rebalance the books under Italian law.

Shareholders meet on June 26 to discuss its cash requirements.

The 60-year-old airline serves 25 domestic airports and 85 in the rest of the world and carried 24 million passengers in 2005. It has a fleet of about 181 aircraft.

Its hubs are at Fiumicino in Rome and Malpensa for Milan. The busy route linking the heart of Italy's politics with the business capital is particularly lucrative and a key attraction for any bidder.

Since 2001, Alitalia has been part of the SkyTeam alliance with Air France KLM , Aeroflot, AeroMexico, Continental , CSA Czech Airlines, Delta , Korean and Northwest .

It has about 20,000 employees including its air cargo services, of which 6,800 are flight crew.

AEROFLOT [AFLT.MM]

Russia's flag carrier and its affiliates carried around 7.3 million people last year, or almost every fourth passenger in Russia.

The company flies 90 planes to 47 countries and controls half of Russia's international flights and 12 percent of its domestic market.

The company has a market capitalisation of over $2.8 billion and posted a 36 percent rise in net profit to $258.1 million last year.

It is bidding with UniCredit , which vies with Intesa Sanpaolo to be Italy's largest bank by market size.

AIR ONE

AP Holding is bidding as the vehicle for Carlo Toto, the head of Air One, Alitalia's closest domestic rival, with the backing of Intesa Sanpaolo -- Italy's biggest retail bank.

Air One had over 33 percent of the domestic market in 2006 and carried over 6.3 million passengers. It has a code-sharing agreement with Germany's Lufthansa , which has denied having any interest in Alitalia's sale.

Air One was born in 1995 from Aliadriatica, a training and taxi service company, with domestic flights from Milan. The same year, it started scheduled flights between Rome and Milan -- the first competitor to Alitalia on Europe's fifth-busiest route.

It employs roughly 2,800 people and serves 23 Italian destinations and nine major international cities.

It had revenues of 611.5 million euros in 2006. It aims to have a fleet of 56 aircraft by the end of this year.

(Sources: Reuters data, company Web sites)
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