Lupi says possible Alitalia deal shows investor interest

Etihad CEO 'confident' of deal ahead of airlines

(ANSA) - Rome, June 2 - The likelihood of a deal between Italian flag carrier Alitalia and Etihad Airways demonstrates rising investor interest in Italy, Transport Minister Maurizio Lupi said in media reports published Monday. "We are at a turning point...I take it as an encouraging sign that could attract other foreign investors," Lupi told Il Messaggero and La Repubblica newspapers.

He spoke one day after Etihad, based in Abu Dhabi, said in a joint statement with Alitalia that it would send a letter outlining its final conditions which the Italian carrier's board of directors must approve before any investment would be made. Lupi called that a "decisive step". For weeks it had been rumoured Etihad planned to invest as much as 550 million euros in cash-starved Alitalia if certain conditions on the Italian carrier's debt and staffing levels were met. But Etihad remained tight-lipped - until Sunday.

"We are confident that we will reach a positive conclusion of the transaction submitted to Alitalia," Etihad Chief Executive Officer James Hogan said in the statement. Previously described by Il Messaggero as a "strategic alliance" that will give Etihad, the flag carrier of the United Arab Emirates, a 49% stake in Alitalia, the deal would give new life to the Italian carrier that was subject to a government-led bailout last fall. That's when the Italian government engineered a 500-million-euro Alitalia restructuring plan that included a 300-million-euro capital increase and 200 million euros in new lines of credit. However, major investor Air France-KLM at the time voted against the restructuring plan, saying it did not go far enough to reduce Alitalia's debt.

Under the plan, Poste Italiane agreed to underwrite the capital increase to the tune of 75 million euros, while Italian banks Intesa Sanpaolo and UniCredit said they would put in up to a maximum of 100 million euros. That triggered complaints from rival European carriers that have complained that amounts to State aid, an accusation that the Italian government has denied.