Etihad Seals $2.4 Billion Deal to Buy 49% of Ailing Alitalia - Bloomberg

Etihad Seals $2.4 Billion Deal to Buy 49% of Ailing Alitalia - Bloomberg:



"Etihad Airways PJSC signed a 1.76 billion-euro ($2.4 billion) deal to purchase 49 percent of Alitalia SpA, giving the Gulf company access to one of Europe’s biggest travel markets and providing a lifeline to Italy’s unprofitable former flag-carrier.



Etihad will invest 560 million euros in Alitalia, while existing core investors have approved a 300 million-euro capital increase and Italian financial institutions will supply the same amount in new loans. Some 598 million euros of short- and medium-term debt will also be restructured. The Italian company will seek to become profitable by 2017, said James Hogan, the Abu Dhabi-based company’s chief executive officer.



“Our entry into Alitalia is to be partners,” Hogan said at a press conference in Rome. “There is no quick fix.”



The deal, which caps months of negotiations between the airlines, bank creditors and unions over questions of debt and job cuts, helps secure Alitalia’s future after Air France-KLM (AF) Group bowed out of a bailout brokered by the Italian government last year. The accord forms the biggest in a string of equity stakes purchase by Etihad in carriers spanning Australia to Ireland which have seen the Gulf airline pitch itself as a “rescue investor” for ailing operators."



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