Alitalia needs 5 bln eur for re-launch, says potential bidder Alazraki |
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Published
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Wed, 10 Jan 2007 15:49
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MILAN (AFX) - Paolo Alazraki, the businessman leading a group of investors ready to bid for Alitalia SpA, said the consortium has a 3 bln eur war chest to fend off the airline's bankruptcy, and will raise another 2 bln eur through a capital hike and convertible bond issue.The group is composed of 16 investors, including Alazraki, and includes hedge funds, venture capitalists, banks, pension funds and an Asian airline, whose identities will only be revealed if the business plan they are presenting to unions receives their blessing, he said during a press conference.Alazraki first met unions yesterday and will meet them again next week to give further details of his plan, which does not foresee lay-offs but an increase in routes that will allow Alitalia to broaden its revenues and sustain its ability to meet costs to get back to profit in the next 36 months.Alazraki said one-third of the 3 bln eur will come from the Asian airline, one-third from venture capitalists and/or hedge funds and the rest from banks, pension funds and/or mutual funds.For the other 2 bln eur necessary to re-launch the airline, the group will decide at a later stage whether to raise capital or to issue a convertible bond, possibly refunding in advance an existing Alitalia bond so as to obtain more favourable financing conditions, he said.On an industrial level, the group's priorities include renewing the fleet, reinstating closed routes, especially those to North America and Latin America (Brazil, Argentina, Chile and Peru).The airline will probably pull out of the SkyTeam alliance, he added.The alliance comprises Aeroflot, AeroMexico, Air France-KLM, Continental Airlines Inc, CSA, Delta Air Lines Inc, Korean Air Lines Co, NWA.Alazraki also wants to broaden the cargo division and to make maintenance once again a core part of the group, as well as set up a real estate fund to manage the ailing airline's property assets.Separately, union leaders told AFX News said the businessman has the 'right approach' but that it is now necessary to have rify the concreteness of the plan' in terms of its financial details.While the identity of the Asian airline is unknown, union officials said that Alazraki's emphasis on Dubai suggested interest from the airline Emirates.yael.schrage@thomson.comysc/icCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Unions says Alazraki's Alitalia plan lacks detail, can't judge feasibility 