Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
We welcome comments via posts to this site. Please send inquiries via email to firstname.lastname@example.org.
Sunday, December 1, 2013
Alitalia Raises Less Than Two-Thirds Of Emergency Cash
Per www.globalinsolvency.com, the Italian airline Alitalia is struggling to pick up cash it needs and Air France-KLM, which has a 25% stake in Alitalia's success, is not willing to provide more funding. So what comes next? A United States based airline in crisis would consider seriously consider an emergency filing under chapter 11 of the bankruptcy code . . . if all else failed.
Has Alitalia gotten to that point yet or what options are available to it? I hope the people making decisions will be good to the airline's employees.
Fri., November 29, 2013
Loss-making Alitalia has yet to raise all of the 300 million euros ($407 million) it was seeking in an emergency cash call, piling more pressure on the Italian airline and find a strategic investor to keep it flying, Reuters reported. Alitalia said on Thursday it had received 173 million euros by a deadline for existing shareholders to subscribe to its cash call via pledges and bank guarantees and expected to raise the rest from the state-owned postal service and other investors. Top shareholder Air France-KLM, with a 25 percent stake, refused to take up its share of the cash call, saying Alitalia's new business plan pledging severe cost cuts was not enough to save the stricken Italian carrier without its creditors writing off some of its huge debts. The Franco-Dutch group has so far been seen as the most suitable carrier to come to Alitalia's rescue. The emergency cash, part of a bigger rescue package engineered by the government to keep Alitalia's aircraft in the air, is seen as a stopgap measure giving the airline a few more months to find a partner to help revamp the group. But with 700,000 euros of daily losses and net debt of 800 million euros Alitalia could soon have to ground its planes. The failure to fully cover the capital increase illustrates that some of Alitalia's existing investors have doubts that the carrier, which has made a profit only sporadically in its 67-year history, can be turned around.