Value of Alitalia deal one billion euros

An Italian investor consortium looking to buy segments of the bankrupt Alitalia is agreeing to take on its debt as well as making cash payouts in a deal that is said to be worth one billion euros, in return for total ownership of the national carrier, the airline is reporting.

CAI, the Italian investor group established for the purpose of rescuing the financially-troubled airline, has agreed to take on 625 million euros of the carrier’s debt, which represents approximately half of what it currently owes.

The remainder of the deal will involve a series of cash payouts, with the first 100 million euro instalment to be paid on the signing of the agreement, Alitalia reported. The binding offer, presented by CAI last month, is valid only until 30 November.

According to Alitalia, under the agreement CAI would buy 64 of its planes and the leasing contracts for 29 additional aircraft. The carrier’s fleet currently comprises 173 aircraft.

A new carrier to be formed as part of the deal would also buy all of Alitalia’s trademarks as well as its takeoff and landing rights.

Beset by labour troubles, high fuel costs and increasing competition from budget carriers, Alitalia declared bankruptcy this past August.

Previous government attempts to sell is 49.9 percent share in the Italian national airline have been unsuccessful, and the Italian prime minister has been pushing for an agreement with the investor consortium, in making good on his pledge to keep the airline in Italian hands.

www.alitalia.com