Poste Italiane to invest €70 million in Alitalia

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Poste Italiane will invest €70 million in Alitalia. Photo: Vincenzo Pinto
11:08 CEST+02:00
Italy’s state-owned Poste Italiane will invest €70 million in the struggling Alitalia as part of a plan to enable a merger with Abu Dhabi’s Etihad, the company said in a statement.

The latest investment by the postal services group follows the €75 million it paid for a 20 percent stake in the airline as part of a €500 million capital increase late last year.

The company said in the statement that the money will be put into a separate investment vehicle that will allow it to avoid taking on Alitalia’s debt, which is estimated at €800 million.

In addition to its existing investment, the company added that the move will enable it to "achieve significant industrial and commercial synergies in the market and is consistent with its business plan."

Etihad has agreed to buy a 49 percent stake in Alitalia, although a deal is yet to be finalised. The airline’s CEO James Hogan said earlier this month that negotiations were in the final stages but that Italy’s national carrier needed to be “right-sized”.

"We don't step into these negotiations unless we're convinced the airline will move to profitability,” he said.

"If we complete, we'll complete with the right foundation. The key issue is getting the cost base right," he said.

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Etihad's initial investment is expected to be around €560 million, and €660 million more has been mooted in future to develop the airline.

Alitalia’s board of directors are due to meet on Friday to discuss the deal.

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