Italy sets course for ITA Airways sale by end of next month

ROME: Italy’s government aims to sell state-owned ITA Airways, the successor to Alitalia, by the end of June after setting a deadline for binding offers of May 23, Economy Minister Daniele Franco said on Tuesday.

Under a government decree, Rome plans to privatize ITA through a direct sale while retaining a minority, non-controlling stake in a first stage.

Three prospective bidders for ITA Airways have had access to its finance data room, Franco said addressing parliament over the issue.

They are shipping group MSC alongside Germany’s Lufthansa , the US Certares fund in cooperation with Delta and Air France, and investor Indigo Partners, Franco added.

MSC in January requested an exclusivity period of 90 days to iron out details of an acquisition, but Rome opted for a market-based procedure aimed at keeping the door open to other potential suitors.

“The outcome of the negotiations is not a foregone conclusion. We will examine the three offers in a transparent way, there is no decision on our part at present,” Franco said adding a key factor is that the buyer is at least 51 percent owned by a European player.

ITA started flying in October, after replacing 75-year-old carrier Alitalia which was finally grounded after years of losses and failed rescue attempts.

Under an agreement with the European Union, Rome can inject up to €1.35 billion ($1.42 billion) into the carrier by 2023. A privatization deal would potentially reduce the financial support granted by the state, limiting the costs for Italian taxpayers.

Last year the Treasury paid a first tranche of €700 million and it is due to inject an additional €400 million this year, with another €250 million scheduled for next year.

“The €400 million contribution is due and will be disbursed when necessary. ITA does not currently have a cash flow problem,” Franco said.