Alitalia pockets emergency cash, heads to union meeting
By Agnieszka Flak
MILAN (Reuters) - Alitalia finally secured the 300 million euros ($412 million) it needs to keep flying over Christmas, a source said on Tuesday, concluding a drawn-out capital raising that showed how much work the airline has to convince investors it can survive.
Italy's national carrier, having pocketed cash that analysts estimate will last it six months, now goes straight to its next challenge: A meeting with unions where sources said it will try to persuade them to sign up to thousands of job cuts.
The cash call was part of a bigger government-engineered rescue to keep Alitalia going while it searches for a new partner willing to invest in revamping its fleet and making it profitable in the longer term. The scale of that task was illustrated by the airline's difficulty in persuading shareholders to sign up for fresh investment - many aired doubts over its proposed business plan or wanted to see tougher restructuring of the airline's debt.
The source said Italy's state-owned postal service, which had been lined up to commit up to 75 million euros for any unsubscribed shares, had to participate in the cash call in the end, although to what extent was not yet known.
"Including subscriptions by existing shareholders, new investors and the investment by the postal service, the 300 million euro target has been reached," the source said.
An Alitalia spokeswoman said the company would comment on the outcome of the capital increase in due course. The deadline to take up any unsubscribed rights in the cash call expires later on Tuesday.
At the same time, Alitalia's management is due to meet trade unions to present details of a revised industrial plan, which sources said could include up to 2,600 job cuts out of the airline's total workforce of 14,000 people.
Unions say they are gearing up for a battle should layoffs at the airline be announced. Any tough restructuring of the airline to suit a foreign investor would also weigh on the already fragile coalition government of Enrico Letta. Continued...