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Italian post service chips in for troubled Alitalia

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Italian post service chips in for troubled Alitalia
Alitalia has launched a vast restructuring plan with €300 million in budget cuts. Photo: Leandro Ciuffo/Flickr
13:17 CET+01:00
Italy's postal service will take part in a much-needed capital increase for Alitalia, Italian media said on Thursday, amid reports that UAE carrier Etihad is preparing a big investment in the troubled airline.

The decision to chip in €75 million to the €300 million increase was taken during a meeting of the state firm that ended in the night between Wednesday and Thursday, the reports said.

Post officials contacted by AFP could not confirm.

SEE ALSO: Etihad preparing offer for Alitalia: report

Flag carrier Alitalia is badly indebted and has also launched a vast restructuring plan with €300 million in budget cuts and the reduction of 1,900 jobs.

The remaining €225 million in the capital increase have already been contributed by Alitalia's existing private sector investors and by banks.

Air France-KLM, which was until now was the main shareholder with 25 percent, has declined to contribute and will see its share greatly diluted.

The capital increase plan was formulated in October and November under pressure from the Italian government but the postal service's participation has been widely criticized as a possible state subsidy.

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