ABU DHABI: Abu Dhabi-based Etihad Airways said Sunday it has entered the final stage of an assessment whether to purchase a stake in Italy's debt-laden airline Alitalia.
The two carriers "have entered the final phase of a due diligence process about a possible investment by Etihad Airways in Alitalia," confirmed James Hogan, chief executive of Etihad Airways, and Gabriele Del Torchio, his Alitalia counterpart, according to a statement by Etihad. The two companies and their advisors will determine during the next 30 days "how a common strategy can be developed which meets the objectives of both parties," said the statement.
"Any issues that may prevent the establishment of an appropriate business plan will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability," it added.
Reports have suggested that Etihad is preparing a big investment in Alitalia, which is in debt to the tune of 1.2 billion euros ($1.6 billion). In October, shareholders gave unanimous approval for a capital increase of up to 300 million euros to save Alitalia from bankruptcy
The carrier is looking for a foreign partner to rescue it.
Etihad is expanding rapidly and has bought minor shares in several smaller carriers around the world as it competes with larger Gulf rivals Emirates and Qatar Airways. Etihad owns 29 percent of Air Berlin, 40 percent of Air Seychelles, 19.9 percent of Virgin Australia and three percent of Aer Lingus.
In November, India's Jet Airways said it had completed the sale of a 24-percent stake to Etihad after obtaining regulatory approvals. Etihad also announced in mid-November that it was acquiring 33.3 percent of Swiss carrier Darwin Airline, which it plans to rebrand as Etihad Regional.
That acquisition is awaiting regulatory approval. (AFP)
Source: The NEWS