ROME (Reuters) - Italian airline Alitalia will hold a board meeting on Tuesday to examine its strained finances as it risks running out of cash before striking a deal with a possible partner.
The airline raised 300 million euros ($410 million) in an emergency share issue last month and was pledged 200 million in fresh bank financing, which analysts said would keep it flying for the next six months. But it may again run out of cash if it fails to attract a cash-rich partner soon.
Alitalia CEO Gabriele Del Torchio said earlier this month the group could be forced to launch another share issue if it did not reach the goals outlined in a new business plan.
“Among other things on the agenda are the company’s funding strategy to implement its new industrial plan,” an Alitalia spokeswoman said. The meeting is scheduled for 1300 GMT.
She said the meeting had been on the agenda since a last gathering of the board, dismissing reports it had been called following special requests by internal auditors.
A source close to the situation said Alitalia was still awaiting the 200 million euros pledged by banks, part of a 500 million euro government-stitched emergency rescue plan meant to keep the carrier in the air while a search for partners continues.
Alitalia is in talks on a possible investment with Abu Dhabi-based Etihad Airways, which sources close to the matter say is willing to take a stake of up to 40 percent.
A tie-up with the Gulf carrier could boost Alitalia’s liquidity and allow it to invest in a new strategy focused on long-haul routes that could make it profitable again.
Alitalia offers access to Europe’s fourth-largest travel market and flies 25 million passengers a year, but has been hit by competition from low-cost carriers and high-speed trains.
Reporting by Alberto Sisto; Writing by Naomi O'Leary and Agnieszka Flak; Editing by Mark Potter