Italy Government Studying Options if Alitalia Sale Fails: Report

Wednesday, 4 Jul 2007 | 6:52 AM ET

The Italian government is studying alternatives regarding the future of the troubled airline Alitalia if the privatization of the company fails, the daily Il Sole 24 Ore said without giving a source.

The government is seeking to sell at least a 39.9% stake in the airline. AP Holding, the owner of the airline Air One, and the investment fund MatlinPatterson are potential bidders. The deadline to present binding offers is July 12.

Prime Minister Romano Prodi and economy minister Tommaso Padoa-Schioppa are wary about the solidity of AP Holding's bid, while MatlinPatterson could seek to make a joint offer with other investors, according to the daily.

If the privatization were to fail, Prodi could be tempted to appoint an administrator to liquidate Alitalia and sell the business piecemeal, it added.

The government could also seek to reopen alliance talks, starting with Alitalia's industrial partner Air France-KLM, the newspaper said.


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