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Potential investor's exam of Alitalia accounts continuing

Etihad considering major investment in Italian airline

07 April, 15:00
Potential investor's exam of Alitalia accounts continuing (See related) (ANSA) - Rome, April 7 - Etihad Airlines continued its examination Monday of the accounts of Italian carrier Alitalia as it considers making a major investment in the cash-strapped airline, according to reports.

Etihad, based in Abu Dhabi, is now considering the commercial terms of an arrangement between the two carriers, as it moves closer to an arrangement to take as much as a 40% stake in Alitalia.

Etihad is continuing its "due diligence" of Alitalia, Chief Executive Officer James Hogan said at the 2014 Global Aerospace Summit in Abu Dhabi, Bloomberg reported. "The mandate I have from the shareholders, the board, is if we can achieve an agreement that meets the commercial mandate then I am to come back and present that," Hogan said, according to Bloomberg.

"At the moment, that's where we are with that discussion".

Because Etihad is not based in the European Union, it is limited to minority stakes to airlines based in Europe, such as Alitalia.

Late last week, the European Commission warned Italian authorities to be careful to follow EU rules on ownership and control of European companies, and investments involving carriers from countries outside of Europe.

If it goes through, the Abu Dhabi-based airline's stake in its Italian counterpart would be the equivalent of a much-needed capital injection of more than 300 million euros.

The Gulf carrier is vying to broaden its network in Europe.

Etihad has been expanding aggressively into Europe and Alitalia would give it a further foothold in a lucrative market.

After buying 29% of Air Berlin, Germany's second-largest airline, in 2011, Etihad has taken stakes in carriers across the world, including Air Serbia, Aer Lingus, Darwin Airlines, Virgin Australia, Jet Airways and Air Seychelles. The president of Enac, Italy's national civil aviation authority, said that the EC's warning was legitimate and timely.