Brussels, 19/06/2002 (Agence Europe) - On Wednesday, the Commission decided not to oppose two restructuring measures for the Italian airline Alitalia - the payment of the third instalment of the EUR 129 million aid for restructuring approved in 1997; and another increase in its capital, this time by EUR 1,432 million. The increase in capital, however, will only be authorised once three private banks (Merrill Lynch, Banca d'Intermediazione Mobiliare IMI and Crédit Suisse) have formally pledged to guarantee the success of the operation.
The Commission came to the conclusion that the conditions for paying this instalment, initially scheduled for 1999, had been complied with, following postponement after Alitalia made a complaint (see Europe of 19 July 2001). With two decisions in 1997 and 2001, the Commission approved the payment of the first two instalments, of EUR 1,032 million and EUR 258 million.
In terms of the plan to increase Alitalia's capital, the Commission took the view that the state's participation in the plan to fully complies with the criterion of an investor in a market economy in that 1) that state's capital injection is below the stake that it held before the recapitalisation (62%); 2) private entities are involved to a significant extent (38%); and 3) private investors are investing before the state invests.
The recapitalisation plan is based on a large-scale strategic plan based on a significant reduction in wage costs, focusing on core business, abandoning loss-making activities, rationalising lines and the fleet, the desire to be part of an efficient group and the expectation of achieving a positive net result and a positive cash flow as from 2003.