AF KLM commits to Alitalia investment as rescue plan details emerge

Air France KLM, which bid unsuccessfully for Alitalia in the spring, is willing to take a stake in an ongoing reorganization effort. "If it can be confirmed that the new company will be profitable, Air France KLM is ready to take out a minority stake in the new company's capital alongside the investors identified by the Intesa Sanpaolo bank," the group said in a statement yesterday.

AF KLM's interest coincided with Italian media reports that the government had amended its bankruptcy laws, paving the way for implementation of Intesa's rescue plan (ATWOnline, Aug. 11). The government's adviser reportedly is proposing to spin off AZ's loss-making units and place them under bankruptcy protection and simultaneously create a new entity, dubbed Newco, for the airline. Sixteen Italian investors have indicated their willingness to inject up to €1 billion in Newco, which would combine a much smaller and restructured Alitalia with privately held Air One, according to the reports. AZ management is scheduled to be briefed on the rescue plan today.