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Alitalia To Be Liquidated If Not Sold


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July 19, 2007

 

Liquidation is the only option for Italian flag carrier Alitalia if the loss-making airline is not sold, Economy Minister Tommaso Padoa-Schioppa said in an interview published on Thursday.

 

The Treasury has officially declared the seven month auction for Alitalia shut with no sale after the last bidders pulled out, with Rome's restrictive terms cited as a major deterrent.

 

"Other than a sale, there is only liquidation," Padoa-Schioppa told Corriere della Sera newspaper. He added that the center-left government was looking at alternatives to sell its stake.

 

"This is a company that is losing money, in which the state cannot inject any more capital," he said. "Making Alitalia attractive to an investor seems more difficult than we thought."

 

The government has said it would look at all options, including opening direct talks with former bidders, to keep hopes of a sale alive and avoid putting Alitalia into administration.

 

The European Commission said on Wednesday Rome could not dole out any further state aid to Alitalia.

 

All three final bidders -- Russia's Aeroflot, US funds MatlinPatterson and TPG, and Italian carrier Air One -- have suggested they could be tempted back if terms were changed.

 

Alitalia is losing more than a million euros a day and needs another cash injection after writing down its fleet in May.

 

A failure to sell Alitalia would be a big setback for the government. It has slumped in polls and is in the midst of difficult talks over pension reform with unions.

 

Alitalia has called a board meeting for Friday.

 

(Reuters)

 

Airwise/Reuters

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