Alitalia investors approve share issue to keep firm from crashing

 
City A.M. Reporter
STOR

STORS in Alitalia unanimously approved a €300m (£253.5m) share issue to keep the near-bankrupt Italian airline flying yesterday.

Alitalia’s biggest investor Air France-KLM, which had said it would seek tough conditions as part of any involvement in the capital raising exercise, gave its approval along with the airline’s other shareholders during an all-night meeting.

The cash call forms part of a €500m government-led rescue plan. But despite approving it, shareholders are under no obligation to participate and have 30 days from 16 October to decide how much money to sink into the issue of new shares.

The state-owned post office, brought in last week to provide emergency funding while Alitalia works out how to ensure its long-term survival, will put in €75m for any unsubscribed shares, while banks Intesa Sanpaolo and Unicredit will guarantee to subscribe for up to €100m.

All eyes are now on Air France-KLM, which owns a 25 per cent stake, and whose potential participation in the capital increase will be a decisive factor for Alitalia’s future.