Italy's giant state-holding company, IRI, has agreed to cut its stake in Alitalia to 60% in what is being billed as the first step towards the flag carrier's privatisation, which could now come in 1998.
The deal, agreed at a meeting of the IRI board on 26 November, will see the holding company cut its stake from the present 86.4%, to be completed by April 1998. Around 20% of the shares will go to employees under the deal struck with the Alitalia unions in mid-year as the price for seeing through a crucial cost-cutting scheme.
The remainder of the IRI shares will be floated on the Italian stock market, where 13.6% of the company is already traded. The share price has risen sharply since the restructuring plan was pushed through in June under Alitalia's new top-management team, including approval for IRI's recapitalisation of the group. Shares have regularly had to be suspended because of soaring prices and trading was again halted ahead of the IRI board meeting as they gained more than 8% on expectations of the deal.
IRI's stake could cede control of the airline in 1998 if, as planned, the next phase of Alitalia's recapitalisation is taken up by outside commercial shareholders. Under the restructuring deal, approved by the European Commission earlier this year, IRI has poured L2,000 billion ($1.2 billion)into the airline to wipe out its debt mountain. Another L750 billion is due over 1998/9, which would be enough to dilute IRI's state below the 50% mark.
Alitalia's chief executive, Dominico Cempella, is pushing for privatisation as soon as possible in the hope of loosening the three-year constraints on growth placed by the EC as a condition of approving the IRI state aid. Although Alitalia is due to decide on a European alliance partner in December (with KLM and Air France jockeying for position), Cempella suggests that this would not involve equity.
As another condition of the EC approval, Alitalia is to sell its five-year-old stake in Hungarian airline Malev. The Italian airline owns 30% with another 5% in the hands of an IRI financial vehicle.
Source: Flight International