Re: Thread Alitalia - Settembre 2016
Alitalia might need capital increase before year-end (dal sole 24 ore)
by Giani Dragoni
Italian airline Alitalia may be forced to ask for a capital increase, after losses for this year have been higher than expected compared to the 2015-2018 business plan approved when Etihad bought a 49% stake in the former flag carrier, according to sources.
The capital increase, authoritative sources indicated, could be passed by the board of directors before the end of this year, together with the new business plan with which Alitalia CEO Cramer Ball will lay out how he plans to stem losses.
There is a risk that 2016 losses could reduce to zero the net assets of Alitalia Spa which at the end of 2015 was reduced to €51.88 million.
At the consolidated level, the Alitalia Group had a net worth of €122 million, but for legal evaluation required under the Civil Code (Articles 2446 and 2447) reference is made to the financial statements of the parent company, in which the equity is only €51.88 million.
How much is Alitalia losing? In 2015 the group reported a net loss of €199.1 million. But the loss was actually higher, and part of it was offset by extraordinary income revenue of €194.16 million for the sale to Etihad 75% of the Mille Miglia frequent flier plan plus €26 million for the sale of 15 aircraft.
Since 2016, the business plan called for the net loss to fall to €44 million.
Il Sole 24 Ore-ItalyEurope24 has learned that in the first months of this year the projections have shown a loss significantly higher than expected, so even the budget in 2016 has been revised for the worse by the board chaired by Luca Cordero di Montezemolo.
Alitalia SpA in 2015 posted a net loss of €408.1 million in the financial statements.
That the company will soon need a capital increase is considered inevitable by the company's top management, although it is not officially declared. Yesterday there was an update on the situation during a board meeting, which was also attended by Vice President James Hogan, who is the chief executive of Etihad.
A capital increase has been discussed as one solution during recent weeks. But one of the obstacles to a recapitalization is the EU constraints on traffic rights: the absolute majority of capital must remain in the hands of European partners, which 51% today is owned by Midco Spa, the vehicle in which there are essentially Italian partners, CAI, Air France-KLM and Poste Italian.
The major shareholders of CAI-Midco are banks, UniCredit and Intesa Sanpaolo, who have no intention of spending more money on the airline, which lost money even during the heydey when global airlines were earning record profits. This prevents Etihad, should it wish to do so, to put money in turn, since the Alitalia would lose its flying rights in the EU if the United Arab Emirates based Etihad increases its stake to beyond 49%.
So they are looking at another option. The alternative, according to well-placed sources, would be to transform debt into equity with a swap, essentially a financial restructuring.
Alitalia might need capital increase before year-end (dal sole 24 ore)
by Giani Dragoni
Italian airline Alitalia may be forced to ask for a capital increase, after losses for this year have been higher than expected compared to the 2015-2018 business plan approved when Etihad bought a 49% stake in the former flag carrier, according to sources.
The capital increase, authoritative sources indicated, could be passed by the board of directors before the end of this year, together with the new business plan with which Alitalia CEO Cramer Ball will lay out how he plans to stem losses.
There is a risk that 2016 losses could reduce to zero the net assets of Alitalia Spa which at the end of 2015 was reduced to €51.88 million.
At the consolidated level, the Alitalia Group had a net worth of €122 million, but for legal evaluation required under the Civil Code (Articles 2446 and 2447) reference is made to the financial statements of the parent company, in which the equity is only €51.88 million.
How much is Alitalia losing? In 2015 the group reported a net loss of €199.1 million. But the loss was actually higher, and part of it was offset by extraordinary income revenue of €194.16 million for the sale to Etihad 75% of the Mille Miglia frequent flier plan plus €26 million for the sale of 15 aircraft.
Since 2016, the business plan called for the net loss to fall to €44 million.
Il Sole 24 Ore-ItalyEurope24 has learned that in the first months of this year the projections have shown a loss significantly higher than expected, so even the budget in 2016 has been revised for the worse by the board chaired by Luca Cordero di Montezemolo.
Alitalia SpA in 2015 posted a net loss of €408.1 million in the financial statements.
That the company will soon need a capital increase is considered inevitable by the company's top management, although it is not officially declared. Yesterday there was an update on the situation during a board meeting, which was also attended by Vice President James Hogan, who is the chief executive of Etihad.
A capital increase has been discussed as one solution during recent weeks. But one of the obstacles to a recapitalization is the EU constraints on traffic rights: the absolute majority of capital must remain in the hands of European partners, which 51% today is owned by Midco Spa, the vehicle in which there are essentially Italian partners, CAI, Air France-KLM and Poste Italian.
The major shareholders of CAI-Midco are banks, UniCredit and Intesa Sanpaolo, who have no intention of spending more money on the airline, which lost money even during the heydey when global airlines were earning record profits. This prevents Etihad, should it wish to do so, to put money in turn, since the Alitalia would lose its flying rights in the EU if the United Arab Emirates based Etihad increases its stake to beyond 49%.
So they are looking at another option. The alternative, according to well-placed sources, would be to transform debt into equity with a swap, essentially a financial restructuring.
