Tags: Alitalia | job | cuts | rescue

Alitalia Said to Propose 2,000 Job Cuts as Board Studies Rescue

Monday, 11 Nov 2013 09:22 AM

Alitalia SpA Chief Executive Officer Gabriele Del Torchio is preparing a savings plan that includes about 2,000 job cuts as investors have until later this week to participate in a 300 million-euro ($402 million) capital increase, according to three people familiar with the matter.

The proposal will be discussed by the carrier’s board on Nov. 13 in Rome and may include early-retirement incentives and a reduction of temporary workers, said the people, who asked not to be identified before a public announcement. The measures are still being discussed and a final decision has not yet been made, they said. An Alitalia representative declined to comment.

Alitalia SpA, which employs about 14,000 people, posted operating losses of 162 million euros in the first nine months as the company carries out the capital increase as part of a 500 million-euro bailout package. Air France-KLM, the biggest shareholder with a 25 percent stake, has said Alitalia must reduce its debt of about 813 million euros before it would invest further in the carrier.

Alitalia was valued at 50 million euros before the capital increase, according to the minutes of an Oct. 14 general meeting. Investors have 30 days to decide from the gathering. The new stock is being offered at a 40 percent discount to the market value, the minutes show.

Alitalia’s latest valuation means Air France has lost 96 percent of its investment in the Italian carrier since it paid 323 million euros for its stake in 2009. The French company had bought the stake after Alitalia had gone bankrupt and was given a fresh start by eliminating its debt, and merging its assets with those of Air One SpA.

Italy’s postal company Poste Italiane SpA agreed to contribute 75 million euros for Alitalia, while the country’s two biggest banks, UniCredit SpA and Intesa Sanpaolo SpA, will guarantee as much as 100 million euros for eventual unopted rights in the capital increase.

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