Etihad Airways and Alitalia have announced that they have signed the transaction implementation agreement which will result in a €1,758 million investment to build a reinvigorated Alitalia as a competitive, sustainably profitable business.

The recapitalised Italian national airline will now be able to invest in a comprehensive strategic business plan which will see new long-haul routes from Rome and Milan, a revitalized brand, and a greater focus on Italian tourism and trade promotion.
Etihad-completes-€560-million-Alitalia

Italian travellers will be able to benefit from a wider choice of destinations while new global connections will boost inbound tourism.

Etihad Airways’ investment of €560 million will be provided through a combination of equity injections, asset purchases and other financing facilities and funding arrangements to re-structure the airline’s balance sheet.

This is to be complemented by a further equity investment of €300 million from existing core Alitalia shareholders, including Intesa San Paolo (€88m), Poste Italiane (€75m), UniCredit (€63.5m), Atlantia (€51m), IMMSI (€10m), Pirelli (€10m) and Gavio (€2.5m).

Additionally, up to €598 million in financial restructuring of short and medium term debt has been provided by financial institutions and existing bank shareholders.

A total of €300 million in new loan facilities have also been extended by Italian financial institutions.

Etihad Airways will take a 49 per cent shareholding in Alitalia, for an investment of €387.5 million.

Its total investment also includes €112.5 million to acquire a 75 per cent interest in Alitalia Loyalty Spa, which operates MilleMiglia, the airline’s frequent flier programme, and the purchase by Etihad Airways of five pairs of slots at London’s Heathrow Airport valued at €60 million.

The slot pairs will be leased back to Alitalia on an arm’s length basis.

The transaction is due to be completed on December 31st 2014.

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