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Sunday, November 3, 2013

Air France-KLM Writes Off Alitalia Stake

Per www.globalinsolvency.com:

Fri., November 1, 2013
 
Air France-KLM, the French-Dutch airline, said Thursday that it had written off the entire value of its 25 percent holding in its partner Alitalia, raising doubts that it will take part in a plan to inject 300 million euros into the struggling Italian flag carrier, The International New York Times reported. With just two weeks before a mid-November deadline for existing shareholders to commit to purchase new shares in Alitalia, the struggling Italian flag carrier, the chief executive of Air France-KLM, Alexandre de Juniac, said that his company — the largest shareholder — had yet to receive any guarantees that Alitalia’s management would take concrete steps to trim the airline’s debt of more than €1 billion, or $1.36 billion, cut operating costs and reduce capacity on European routes. “If these conditions are not met on the 14th of November, we will not consider any participation,” Mr. de Juniac said at a briefing in Paris. Air France-KLM said that “given the uncertainty of the situation of Alitalia,” it had taken a third-quarter charge of €119 million, which it said represented the full residual value of its stake. The company bought the shares in 2008 for €323 million, when Air France-KLM joined a consortium of Italian companies to rescue the carrier, then state-owned, from bankruptcy.

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