Italian holding company Atlantia has walked away from taking part in a €1 billion ($1.1 billion) plan to rescue financially ailing flag carrier Alitalia. Atlantia had been linked to a €300 million investment in Alitalia in return for a 30% stake. Active in the infrastructure sector, including motorways, airport infrastructure and transport services, Atlantia is controlled by Italy's Benetton family.
"The conditions that need to be met in order for Atlantia to be able to take part in a consortium, set up to put together a binding offer for Alitalia, do not as yet exist," the company said in a Nov. 19 news release. "In any event, Atlantia continues to be willing to engage in the process of identifying an industrial partner and reaching an agreement on a solid, long-term business plan for the turnaround of Alitalia."
Atlantia's board said in October it was willing to participate in the rescue plan predicated on establishment of a new company with the participation of a major airline that would contribute operational and management experience.
In exchange for its minority shareholding, Atlantia also demanded the participation of an industrial partner and agreement among the new owners on a defined business plan, governance structure and senior management roles.
As previously reported, U.S. air carrier Delta Air Lines Inc (NYSE: DAL) and German giant Lufthansa are considering a role in the bailout. Delta has pushed back on a request from the Italian government to sweeten its offer of €100 million for a 10% equity stake in a new Alitalia. Lufthansa says it will not take an equity stake in the resurrected carrier before it has gone through a complete restructuring.
Another cornerstone investor in Alitalia is expected to be Italian state-owned railway group Ferrovie dello Stato (FS) with a 40% stake.
Privatized in 2008, but under administration since May 2017, Alitalia has not turned a profit since 2002, losing approximately €343 million on €3.3 billion of revenue in 2018 alone. The Italian government is facing the prospect of lending Alitalia hundreds of millions of euros if a private sector solution cannot be found.
The latest deadline for a binding offer to rescue Alitalia expires on Nov. 21.