AFTER A SERIES of last-minute delays, Alitalia's rescue plans including a badly needed cash injection have been agreed by the airline's parent state-holding company IRI.
IRI eventually emerged from a shareholders' meeting on 1 July saying that it had agreed to provide Alitalia with L3 billion ($2 billion). Half of the cash will be paid by the end of the year, with the remainder to arrive by mid-1997 as Alitalia completes the restructuring plan agreed with its unions in June.
The cash is likely to arrive piecemeal, as IRI is burdened with massive debts and is expected to raise some of the cash through asset sales and privatisations.
Alitalia will raise further cash through its own asset disposals, including the sale of its impressive headquarters building outside Rome and a deal with Fiat to take over the Alfa Avio engine-maintenance business.
The Italian flag carrier predicts that, with the new capital in place, it could be back in profit by the end of 1997, preparing the group for a planned privatisation.
Source: Flight International