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ITA Airways: the crux of privatization

Italian Government could choose best offer by August 31

After the announcement by current Prime Minister Mario Draghi that his government will take up the privatization procedure of the national airline ITA Airways, there are some crux to be solved first to conclude the process. For this reason, the Executive had asked the two ropes interested in the purchase, the Italo-German Msc-Lufthansa and the US fund Certares, to send a new offer. 

This is the third binding purchase proposal to be made since May. The offer must be received by 11:59 pm Aug. 22 and will be evaluated in 10 days. The first crux to be solved with the new proposal is the price: in early July Msc-Lufthansa valued ITA Airways at 800-850 million euros while the Certares Fund and 600 million euros, but the government would like more. 

The Ministry of Economy and Finance (Mef) would also like more influence than Msc envisions: it would like 60 percent, leaving 20 percent to Lufthansa and 20 percent to the Italian government. While Certares would keep 60 percent for itself and give 40 percent to the Executive. The latter could accept the situation in exchange for stronger governance on the board: out of five directors Msc-Lufthansa would give one from the Mef, while Certares would give two. In this way, the Treasury would aim to direct strategies regarding investments, fleet, and new markets.

Another crux concerns management: the Executive would like to have a say in the appointment of ITA Airways' top management. On this point Certares seems possibilistic, while Msc-Lufthansa rejects any possible veto power. On the other hand, according to rumors Certares would not have enough assets to guarantee the airline's growth, unlike the rival cordate. In addition, the state would like to know how much each suitor would be willing to pay the government when Mef finally exits the board. The best offer could be chosen by August 31.

On the same topic see also the article published by AVIONEWS

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AVIONEWS - World Aeronautical Press Agency