by Giorgio Pogliotti
The negotiations for the acquisition of up to 40% of the former national airline by the Germans are nearing completion
2′ of reading
The negotiation for the entry of Lufthansa with a minority stake in the capital of Ita Airways is close to the finish line. The German managers have asked the Ministry of the Economy to extend the exclusive negotiation to May 12, compared to the original deadline of April 24 (not peremptory), and the green light has come from the MEF for this supplementary investigation, after already in the in recent days a probable postponement of the signing to the first week of May had emerged. As announced by the president of Ita Airways, Antonino Turicchi “the operation, in its structure, is defined, then the fact that someone wants to change it by a comma is part of the negotiation”.
The knots: the disbursement for the minority and for control
The amount of Lufthansa’s investment is being defined, which through a reserved capital increase intends to acquire up to 40% of Ita from the Treasury: a figure of around 250 million is being considered. In the pre-agreement, Lufthansa could indicate the amount of the investment for entry into Ita Airways in the form of a reserved capital increase, while the percentage will only come out at the time of closing, based on the value that Ita Airways will have at that point.
Breakeven expected in 2025
But the real crux is on “phase 2”, i.e. on Lufthansa’s option to control Ita. To be exercised after reaching the breakeven, expected after two years (in 2025), when by 2026 the company will have become “profitable”. The Government intends to ensure protection of the public interest after the first two years and there are two options in the field: through the maintenance of a shareholding or with the presence of representatives on the board. However, the statute will need to be changed.
Accounts in the red and the “time factor”
In 2022 Ita Airways recorded a negative Ebit of over 550 million and net losses of 486 million. According to the data disclosed by the CEO, Fabio Lazzerini, Ita Airways closed the first quarter with passenger revenues of 345 million euros 402 million in cash (compared to 424 million at the end of 2022), but the increases will start from April wages for seagoing and ground personnel which, according to forecasts by experts, should be worth around 10-15 million per quarter.
EU Antitrust green light expected by the summer
Once the agreement between the Mef and Lufthansa has been reached, the dossier will be sent to Brussels to obtain the go-ahead from the European Antitrust, expected by the end of the summer. At that point the agreement will be concluded and Lufthansa’s resources will enter, in addition to the 250 million of public money, the last tranche of the 1.35 billion that have obtained the approval of the European Commission. The time factor is decisive, because at that point Ita will enter winter, the season in which airlines traditionally burn cash.
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George Pogliotti
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