The Alitalia Chief Executive expects about 2,200 jobs to be cut under a planned merger with Gulf airline Etihad Airways, according to reports carried by La Repubblica newspaper on Sunday.
Gabriele Del Torchio said Etihad had declined to bulge with regard to the job-cut issue, the Newspaper said.
Alitalia and Etihad have been in negotiations since December, but they’ve failed to reach a deal because Italy refuses to accept demands for job cuts and a reorganization of the carrier’s debt, as Reuters reports.
Italy’s labor Minister Giuliano Poletti anticipates job losses of up to 2,500 and said that Alitalia was going to meet trade unions on Thursday.
Reports from the newspaper suggested that Etihad had asked creditor lenders to write off 30% of the Alitalia’s debt and turn the rest into equity.
“I don’t think there are big problems on the horizon on this one,†Torchio is quoted as saying.
It remains necessary that Etihad reaches a deal with Alitalia’s creditors among them two of the biggest lenders in Italy Intesa Sanpaolo and UniCredit, regarding how to restructure a debt amounting to 700 million euros or $953 million.
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UniCredit’s chief executive Federico Ghizzoni was reported by Italian media over the weekend as saying that it was difficult to honor Etihad’s demands; although he was upbeat an agreement would be reached.
Del Torchio said that the current controlling owner of Alitalia, CAI, would take a 51-55% stake in the merged Alitalia. Etihad would own between 45 and 49%.
According to Khaleej Times, Alitalia is expected to close the deal with Etihad soon after its board okays the bailout arrangement proposed by the Gulf carrier. Alitalia’s board met on Friday.
“The board has allowed Alitalia President Roberto Colaninno and chief executive Gabriele Del Torchio to continue negotiations for the drafting of a definitive agreement with the UAE company,†the board stated.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
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