Etihad Airways cautioned Thursday it may take several months to close the deal for a 49% stake in Alitalia.
Etihad said the agreement with Alitalia “was the latest step in a process which could lead to the finalization of a proposed transaction.” According to the Abu Dhabi-based carrier, while “principal terms and conditions” had been agreed upon, several steps remain before the deal is sealed.
“Further steps will include: completion of the transaction documents; finalization of the conditions precedent; application for regulatory approval; and final shareholder and board approvals,” Etihad said, adding, “These next steps will be worked through over the coming months.”
Alitalia urgently needs the infusion of cash that Etihad will provide through its equity purchase. Despite a major rescue package that was finalized at the end of last year, Alitalia has continued to hemorrhage cash. Industry observers believe it is likely to run out of cash by the end of the summer.
Alitalia, like many European legacy carriers, has faced tough times in recent years. Italy, in particular, has proved lucrative for low-cost carriers, which have eaten into Alitalia’s domestic market. The airline also faces competition on its home turf from Italy’s growing high-speed rail network.