August 8, 2014

Alitalia and Etihad Airways finalize €1,758m investment deal to build a reinvigorated Alitalia

Etihad Airways and Alitalia have signed the transaction implementation agreement which will result in a €1,758 million investment to build a reinvigorated Alitalia as a competitive, sustainably profitable business. The recapitalised Italian national airline will now be able to invest in a comprehensive strategic business plan which will see new long-haul routes from Rome and Milan, a revitalized brand, and a greater focus on Italian tourism and trade promotion. Italian travellers will be able to benefit from a wider choice of destinations while new global connections will boost inbound tourism. Etihad Airways’ investment of €560m will be provided through a combination of equity injections, asset purchases and other financing facilities and funding arrangements to re-structure the airline’s balance sheet. This is to be complemented by a further equity investment of €300m from existing core Alitalia shareholders, including Intesa San Paolo (€88m), Poste Italiane (€75m), UniCredit (€63.5m), Atlantia (€51m), IMMSI (€10m), Pirelli (€10m) and Gavio (€2.5m).
Additionally, up to €598m in financial restructuring of short and medium term debt has been provided by financial institutions and existing bank shareholders. €300m of new loan facilities have also been extended by Italian financial institutions. Etihad Airways will take a 49% shareholding in Alitalia, for an investment of €387.5 million. Its total investment also includes €112.5m to acquire a 75% interest in Alitalia Loyalty Spa, which operates MilleMiglia, the airline’s frequent flier programme, and the purchase by Etihad Airways of five pairs of slots at London’s Heathrow Airport valued at €60m. The slot pairs will be leased back to Alitalia on an arm’s length basis. The transaction is due to be completed on December 31st, 2014. Completion of the equity investment remains subject to completion by Alitalia and its key private and public stakeholders of certain conditions precedent and is also subject to final regulatory approvals.



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