Dec. 18 (Bloomberg) -- Alitalia SpA is close to getting a capital injection of about 300 million euros ($413 million) from Etihad Airways, three people familiar with the plan said.
Talks are at an advanced stage over a deal that would make Abu Dhabi-based Etihad the No. 1 investor in Alitalia, according to the people, who asked not to be named because the process is private. No final decision has been made and the Rome-based company has sounded out other potential partners, they said. Alitalia and Etihad may meet tomorrow in Rome to close the accord, one of the people said.
Etihad has been given access to accounts and is evaluating an offer while awaiting the final results of Alitalia’s capital increase and a union agreement on job cuts, the people said. Both airlines declined to comment on the matter.
Alitalia is seeking an international investor after existing shareholder Air France-KLM Group decided not to take part in the capital increase, diluting its stake to 8 percent from 25 percent and ending its veto right on new partners.
Alitalia needs fresh funds after losses piled up and reserves dwindled. Italy’s government has brokered a rescue package including the capital injection, worth 300 million euros and backed by the country’s two largest banks, with the state-owned postal service contributing 75 million euros.
In return, Alitalia plans to cut costs by 295 million euros after reducing its headcount by 1,900, Chief Executive Officer Gabriele Del Torchio told unions earlier this month.
Italian Premier Enrico Letta is directly involved in the process of seeking outside investment as he pushes to find a final solution for Alitalia, one of the people said.
Air France-KLM bought its stake in Alitalia in 2009 and saw the value of that holding collapse as the Italian carrier’s crisis deepened.
Etihad Chief Executive OFficer James Hogan has pushed his strategy of taking over equity stakes in smaller carriers in Europe, India and Australia that has allowed him to build a network to improve passenger flows through his base in Abu Dhabi or jointly purchase aircraft and share equipment such as seats. Hogan was among the most active buyers at the Dubai Air Show last month, buying more Airbus SAS and Boeing Co. wide-body jets.
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