Alitalia Investor Fondiaria-SAI to Skip Capital Increase

By Laura Bonadies and Gilles Castonguay

MILAN--Alitalia shareholder Fondiaria-SAI SpA (FSA.MI) won't take part in a EUR300 million capital increase intended to save the Italian airline from insolvency, the head of the insurer's parent company said Friday.

Fondiaria-SAI, which is owned by Unipol Gruppo Finanziario SpA (UNI.MI), is the first prominent shareholder to announce its intention to skip the operation and dilute its stake, which stands at 4.4%.

"No, we won't subscribe," Unipol Chief Executive Carlo Cimbri told reporters on the margins of an event, according to MF-Dow Jones. "The stake isn't strategic."

Mr. Cimbri is overseeing Unipol's acquisition of Fondiaria-SAI, which has had the stake since it joined a group of private investors in the rescue of Alitalia when it went bust in 2008.

Other shareholders are expected by industry observers to follow suit.

They have until Nov. 16 to decide whether to take part or not.

Bank Intesa Sanpaolo SpA (ISP.MI), toll-road operator Atlantia SpA (ATL.MI) and holding company IMMSI have all declared their intention to put up the money. They are among the biggest shareholders, owning a combined 25% stake.

But the single biggest shareholder, Air France-KLM SA (AF.FR), has yet to commit, preferring to wait for the details of a new restructuring plan. It owns 25%.

Alitalia's bankers Intesa Sanpaolo and UniCredit SpA (UCG.MI) have offered to pick up any shares left unsold in the capital increase. UniCredit isn't a shareholder.

Poste Italiane has also pledged up to EUR75 million to make up for any shareholders who are unwilling or unable to take part. The state-owned postal services provider was brought in by the government to convince creditors and shareholders to keep Alitalia in business.

Despite its inability to make money, Alitalia is considered by the government as a strategic asset for the country.

The government stands to have the state return as a shareholder of the airline after having privatized it in 2008 because it fears the loss of thousands of jobs if it were to let it go bankrupt again.

Write to Gilles Castonguay at [e-mail]; Twitter: @GRCastonguay

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