Alitalia seeks capital hike, Air France-KLM votes against: source

Thu Sep 26, 2013 5:12pm EDT
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By Alberto Sisto

ROME (Reuters) - Struggling Italian carrier Alitalia will seek a capital increase of at least 100 million euros ($135 million), it said on Thursday after reporting another heavy loss for its first half.

But its top shareholder Air France-KLM (AIRF.PA: Quote), which holds a 25 percent stake, voted against the capital hike proposal, a source close to the matter said. The Franco-Dutch group declined to comment.

Alitalia, which has struggled to make a profit throughout its life and was bailed out repeatedly by the Italian state before being privatized in 2009, again faces a cash crunch.

Its net loss for the first six months was 294 million euros, on top of losses of more than 840 million euros the group had already accumulated since its privatization in 2009.

Analysts said it needed a sizeable cash injection and a strong foreign partner.

"The shareholders will be called to approve a capital increase of no less than 100 million euros," the company said. It did not specify the terms of the capital increase, which usually includes a share issue.

"With this capital hike they are just buying time, but it doesn't really solve the problem," said Andrea Giuricin, a transport analyst at Milan's Bicocca University.

"First they need to find the money to recapitalize."   Continued...

An Alitalia plane passes an Air France plane on the tarmac of Charles de Gaulles International Airport in Roissy near Paris, January 8, 2013. REUTERS/Charles Platiau