Mon, Sep 27, 2004
Accord will allow the airlne to set in motion a viability plan
to restructure itself
The European Community
Transport Commisioner, Loyola de Palacio, has confirmed that
Alitalia has reached an agreement with its labor unions that will
allow it to begin restructuring itself under a viability plan.
"This is a first important step in the indispensable restructureing
process" for the airline, said De Palacio.
Alitalia closed a deal with its labor, which calls for a
reduction of 3,700 people from its workforce, down 1,300 from the
original 5,000 planned layoffs. De Palacio issued a press release
in which she expresses her satisfaction "that the sense of
responsibility of all parties involved in this matter has
prevailed."
The European Commission will now have to issue its ruling on the
plan once it examines the details as communicated to them by the
Italian government. Once the restructuring plan is approved, the
company will be able to benefit from a 400 million Euro loan,
approved by the Italian Parliament with the blessing of the
European Community, in order to take care of its most urgent
financial problems.
Two months ago, the European Commission approved Alitalia's
rescue plan presented by the Italian government. The plan set forth
the granting of the bridge loan and the subsequent restructuring of
the company, without any further assistance from the
govermnent.
At that time, the EC warned that it would keep a close eye on
the proceedings to make sure that no additional supplementary help
is added to the restructuring, given that Alitalia has already
benefitted from such a financial tool in 1997, and regulations only
allow one such bailout.
The plan approved by the EC also includes a pledge on the part
of Italian authorities to divest themselves from their share of the
company in "a term not to exceed 12 months," which can only mean
that the airline is about to be privatized. The Italian government
currently holds 62 percent of outstanding Alitalia shares, and has
agreed to reduce its participation to 49 percent in 12 months or
less. This guarantees that there will be no recapitalization on the
part of the state after the restructuring is complete.
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