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Alitalia to Get a Controversial, Last-Minute Cash Injection

Jan 13, 2014 4:00 am

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A little lesson out there for everyone: When Air France thinks you’re an investment in a much too complicated set of circumstances, you’re a bad investment.

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Italy’s flagship carrier Alitalia is expected to win shareholder approval on Monday for a €300m (£250m) cash injection in a latest bail-out guaranteed to trigger complaints from rival airlines.

A meeting of Alitalia’s 22 shareholders is likely to vote through the latest rescue, made all the more controversial after the Italian government corralled the state-owned post office, Poste Italiane, to stump up around €75m for the debt-laden carrier.

The involvement of Poste Italiane has already triggered a complaint from the European Low Fare Airlines Association (ELFAA), a Brussels-based group whose members include Ryanair, easyJet and Flybe.

ELFAA maintains that Poste Italiane’s investment is a clear breach of European state aid rules.

The bail-out is also expected to see a fundamental restructuring of the shareholder base after Air France-KLM refused to participate in the latest rescue of Alitalia, which has more than €1bn debts.

Air France-KLM said it would not inject more cash unless there were big changes to operations and strategy.

Today’s bail-out is likely to see Italian banking group Intesa Sanpaolo emerge with about 23pc of the company, Poste Italiane take 18pc and Unicredit about 11pc.

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