Alitalia to seek new public offers

September 22, 2008

, ROME, September 22 – Alitalia will call for public offers to buy the near-bankrupt Italian national airline this week, after Italian investors withdrew a takeover bid rejected by some unions, Italian media reported.

A public announcement calling for bids from investors before September 30 will be published Monday on Alitalia\’s website and on Tuesday in Italian and foreign newspapers, the ANSA news agency said.

"We are going to make a public tender (for offers). That will formalise what I have been doing for a long time," the airline\’s administrator Augusto Fantozzi told the daily Rome Il Messagero.

"I continue to sound out the market," he said, adding that so far no offer had come through.

The prospect of a foreign company taking over Alitalia surfaced Thursday when the Italian Air Company (CAI) consortium withdrew its one-billion-euro (1.4-billion-dollar).

They backed off after six of the airline\’s nine trade unions rejected a deal that would have led to 3,250 job losses.

On Sunday, Italian Transport Minister Altero Matteoli said that without a deal Alitalia flights could be grounded in less than a week.

He told the business daily Il Sole 24 Ore that Alitalia\’s licence could be withdrawn "in five or six days" and described CAI\’s offer as "the only option" to save the company.

The president of Italy\’s National Civil Aviation Authority (ENAC) said Friday that a ruling on Alitalia\’s future would be made within a week to 10 days, but Matteoli insisted that "a decision must be taken earlier."

"The only option is that unions sign the agreement (with CAI). All Alitalia flights will be grounded within a few days from now, as described in the law," Matteoli was reported as saying.

Senior ENAC officials are set to meet with Fantozzi on Monday.

If there are no new offers or any indication of an improvement in the company\’s financial situation, then ENAC will open an investigation into whether its licence should be withdrawn.

Guglielmo Epifani, the head of the powerful Italian General Confederation of Labour (CGIL) called Fantozzi\’s decision to invite public bids for Alitalia "a new and positive move."

"Bankruptcy would be a tragedy. Fantozzi is right to look for alternatives to bankruptcy," said Epifani, who expressed the desire for Fantozzi to take an active role.

"If he (Fantozzi) takes over the negotiations, we would return to the (negotiating) table," he said.

However, Labour Minister Maurizio Sacconi told television channel Sky Tg24 that there could be "no reopening of negotiations."

Epifani on Saturday also raised the idea of selling Alitalia to a foreign company, a move Italian Prime Minister Silvio Berlusconi has opposed.

In April, Air France-KLM to withdraw its offer for the beleaguered airline after opposition from some of the trade unions and comments from Berlusconi who, in the middle of the election campaign that returned him to power, called for an Italian solution to the problem.

Berlusconi, who wants to keep Alitalia in Italian hands, said Saturday there was no alternative to CAI\’s bid and warned the airline could soon go bankrupt.

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