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Alitalia Shares Drop After Chairman Resigns

Alitalia shares fell more than 3% Wednesday, following the resignation of Chairman Berardino Libonati after less than six months with the troubled airline.

The former telecom executive had joined the company in February, after shareholders ousted Chairman and CEO Giancarlo Cimoli. Alitalia has since been without a chief executive during the Italian government's failed attempt to auction its stake in the flagship carrier.

Libonati had accepted the post of chairman in view of the possible sale of the airline, but after the collapse of the seven-month auction process he felt that "managerial abilities and acknowledge of the sector" were now needed for the job, Alitalia said in a statement late Tuesday.

The Economics Ministry, Alitalia's main shareholder, said in a statement that it would propose Maurizio Prato, a former senior executive at state-controlled aerospace and defense company Finmeccanica, to replace Libonati.

Alitalia's board is scheduled to meet Wednesday and the ministry said it hopes the airline's new head will quickly find a buyer for the company.

The Italian government is seeking a private investor to buy at least a 39.9% stake in Alitalia, but is prepared to sell its entire 49.9% stake. Shares in Alitalia fell 3.3% at 0.885 euros ($1.21) Wednesday on the Milan stock exchange.

The government was forced to call off the auction on July 18 after all bidders progressively dropped out, with many citing restrictive conditions and shifting guidelines. The bidders included Air One, Italy's second-most traveled carrier, Texas Pacific Group, the private equity house, and Russia's Aeroflot Russian Airlines.

Hurt by frequent strikes and competition from low-cost carriers, Alitalia loses between 1 million euros and 2 million euros ($1.4 million and $2.8 million) a day.

The government has been looking at options and has ruled out liquidating the company. On Sunday Economics Minister Tommaso Padoa-Schioppa ruled out direct negotiations with private buyers, saying the courts would not allow it.