The European Commission concluded on Friday 10 September that two loans worth 900 million euros granted by the Italian State to Alitalia in 2017 were illegal under EU State aid rules. Italy must therefore recover the illegal State aid, plus interest, from the company.
Alitalia, an Italian airline, has been loss-making since 2008. In 2017, the company was in urgent need of liquidity, but had lost access to credit due to its deteriorated financial situation. To enable it to continue its activities, in May and October 2017, Italy granted it two loans, of 600 million euros and 300 million euros respectively. At the same time, Alitalia was placed into special bankruptcy proceedings under Italian bankruptcy law.
On 23 April 2018, the Commission opened a formal investigation procedure to determine whether the two loans were in line with EU State aid rules.
The Commission’s investigation showed that, when it granted the two loans to Alitalia, the Italian State did not act as a private investor would have done, since it did not assess in advance the likelihood of repayment of the loans, with their interest. The Commission’s assessment of Alitalia’s financial statements at the time showed that it was unlikely that the airline would be able to generate sufficient cash to repay the State loans by their maturity date or that it would be able to sell its assets to raise sufficient cash to repay the debt.
The Commission concluded that no private investor would have granted the loans to the company at the time and that they constituted State aid under EU State aid rules.
The Commission found that the aid could not have been authorised as rescue aid under the Guidelines on Rescue and Restructuring aid, as notified by Italy.
Link to the case: https://bit.ly/3leXwgM (Original version in French by Lionel Changeur)