Alitalia sale process extended, PE still in the running

Amedeo Goria
16 October 2017

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The sale process for struggling Italian government-backed airline business Alitalia has been extended to April next year, with private equity firm Cerberus reportedly still in the running.

Following an initial extension of the deadline to 5 November 2017, the Italian government has extended the sale process for the insolvent airline to 30 April 2018. According to a statement, the government increased its €600m bridge financing for the business to €900m and extended its maturity to September 2018. The company is backed by Etihad Airways and the Italian government.

According to local press reports, three bidders are still taking part in the sale process: competitors Lufthansa and EasyJet, and US-based private equity fund Cerberus. The reports estimated the business's value at €700-800m.

Alitalia was declared insolvent for the second time in a decade in May 2017, following high losses reported in Q1 2017 and the rejection of a €2bn recapitalisation plan led by Etihad. Initially, the company filed for bankruptcy in 2008. The business currently has €1.2bn net financial debt, according to press reports.

In May 2017, around 30 strategic investors and private equity firms were reported to be submitting non-binding offers in the sale process, including fund managers TPG and Cerberus.