Alitalia Hires Adviser as It Seeks EU300 Million to Fund Revamp

Alitalia SpA has hired Gruppo Banca Leonardo to help raise hundreds of millions of euros before the end of this year as the biggest Italian airline embarks on a new strategy aimed at ending operating losses in 2014.

Milan-based Leonardo is due to report back on preliminary talks with banks at an Alitalia board meeting scheduled for later this month, the airline in a statement late yesterday.

Alitalia’s industrial plan through 2016, published July 7, outlined a need to boost financial resources by 300 million euros ($395 million) this year. The Rome-based company also aims to garner 55 million euros in convertible loans from investors, after seeking to raise 150 million euros earlier this year.

Established after Italian regional operator Air One SpA absorbed assets of the old Alitalia after that airline went bankrupt in 2008, the company’s loss widened to 280 million euros last year amid a squeeze from low-cost carriers and high-speed train operators. The new strategy places more emphasis on inter-continental routes, with development of the long-haul fleet, together with alliances with domestic rail rivals.

Alitalia’s biggest single shareholder is Air France-KLM Group (AF), Europe’s largest airline, which bought 25 percent of the stock for 323 million euros in January 2009 after being selected as partner ahead of German competitor Deutsche Lufthansa AG. (LHA)

Lock Up

Remaining shares are held by financial and industrial groups including Roberto Colaninno’s Immsi, which led the creation of the new Alitalia and includes Intesa Sanpaolo SpA, the country’s biggest bank, and toll-road company Atlantia SpA.

After the Colaninno-backed airline began operations in 2009, Italian shareholders were subject to a four-year lock up limiting the sale of stock to their local co-investors.

That restriction expired in January, while a further clause that replaced it -- requiring the Alitalia board to approve third-party sales -- will lapse next month, potentially opening the way to further investment from an outside airline.

Air France-KLM Chief Financial Officer Philippe Calavia said in July that the carrier would wait until the year’s end to assess progress at Alitalia before deciding whether to change its shareholding. An Air France spokesman wasn’t immediately available for comment on the company’s intentions today.

Alitalia managers have met with Etihad Airways to discuss a commercial accord that could also see the Gulf carrier taking a holding, Il Sole 24 Ore reported last month, without saying where it go the information. A meeting of the Italian company’s board yesterday might have discussed Etihad’s interest in a 30 percent stake, the newspaper said today.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net; Tommaso Ebhardt in Milan at tebhardt@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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