Shareholder Air France-KLM has confirmed it will not take part in Alitalia's €300 million ($405 million) capital increase, saying the necessary financial restructuring measures are still not met but will convert bonds in the carrier.
Alitalia's board of directors yesterday approved a revised business plan aimed at making it more competitive through a "sharp reduction in costs" and including a cut in its medium-haul fleet.
Air France-KLM, which took a 25% stake when the carrier was relaunched as a private operator at the start of 2009, has refused to commit to taking part in the vital capital increase in Alitalia. While not ruling out investment, it has consistently said "strict conditions" on the restructuring of the carrier must be in place and views the carrier's strategic plan unveiled in July was too optimistic.
"Even if the industrial component of the new plan presented yesterday by Alitalia is a step in the right direction and is receiving Air France-KLM's full support, the necessary financial restructuring measures are still not yet met," Air France-KLM says in a statement, confirming it will not subscribe to the capital increase. Alitalia had extended the deadline to take part in the capital increase to allow time for shareholders to review the new business plan.
But the carrier, which has joint venture with Alitalia on Franco-Italian routes, as well as widespread co-operation through SkyTeam affirmed its commitment to remain a "loyal and serious partner" of the Italian carrier.
"As a confirmation of its support to Alitalia, Air France-KLM, after the capital increase is completed, intends to convert its convertible bonds, which will improve the equity of Alitalia and keep a strong relationship between the airlines through the stake of Air France-KLM in Alitalia," it says.
Alitalia has previously said state-postal service Poste Italiane has agreed to take up to €75 million in any unsubscribed shares. Banks Intesa Sanpaolo and Unicredit have also guaranteed to underwrite €100 million in any unexercised share options.