FRANCE-KLM became the subject of a tug of war over its role in crisis-torn Italian partner Alitalia yesterday as Rome invited it to double its stake, while shareholders and unions look ready to resist any new lifeline.
The board of Air France-KLM, which owns 25 per cent of Alitalia after helping it out of bankruptcy in 2008, was due to meet yesterday afternoon as Alitalia prepares to tap shareholders for cash for a second time this year, sources said.
Alitalia is in the midst of a new crisis as it faces a cash shortfall of some €400m and private Italian shareholders, who also took part in the 2008 rescue, become free to sell their shares when a lock-up expires in a month’s time. Air France-KLM will discuss whether to maintain its stake by participating in a capital increase, risk upsetting unions and the Dutch side of the company by raising its stake, or risk a Franco-Italian row by turning its back on its partner in the Skyteam alliance of airlines.
Italian transport minister Maurizio Lupi raised the stakes ahead of the meeting by saying Italy would not oppose an increase in Air France-KLM’s stake to 50 per cent, effectively opening the door to foreign control.