Italy's largest bank confirmed on Wednesday that it will continue to back a bid by AirOne airlines for national carrier Alitalia in order to "do something useful for our country".
The bank's CEO Corrado Passera said on Wednesday he was not surprised that the bid presented by AirOne chief Carlo Toto, through AP Holding, made the Treasury's short list of potential buyers for a controlling stake of no less than 30.1% of Alitalia.
"We will now work with Toto's group to prepare a business plan for Alitalia and we hope we will be able to do something useful for our country," he said.
The 105 million euros Intesa SanPaolo has already given AirOne to bankroll its bid "was only an initial investment, to be able to qualify for the second stage of the tender. The business plan we hammer out will determine how much more will be needed to turn Alitalia around," Passera added.
There were unconfirmed reports in the Italian press on Wednesday that Toto had agreed to give Intesa SanPaolo a 20% stake in AirOne, Italy's second biggest airline, in exchange for putting up the 105 million euros needed for the initial bid.
It is still unclear whether or not AirOne's partner Lufthansa will join the AP group's bid. The German carrier did not present any initial bid on its own.
Aside from the AP group, the other four bidders to make the short list, out of an initial 11, were: a consortium headed by Management and Capitali, a bailout fund set up by Italian financier Carlo De Benedetti; the private equity fund Matlin Patterson Global Advisors; Unicredit Banca Mobiliare, a financial arm of the Italian banking giant headed by Alessandro Profumo; and the European branch of the American equity firm Texas Pacific Group.
Unicredit is believed to have presented a bid on behalf of an unnamed potential buyer which some market observers believe could be Air France-KLM, which already holds a 2% stake in Alitalia, or even Lufthansa, should it decide not to join forces with AirOne.
The five will now be able to look at Alitalia's accounts and will have until mid-April to present a second non-binding bid which aside from an economic offer must include a detailed plan which takes into consideration the Treasury's conditions.
These conditions include maintaining the airline's brand and national character, the quality of service and employment levels.
The Treasury, which holds 49.9% of Alitalia, is privatising the carrier with Merrill Lynch acting as financial advisor, Bain & Company dealing with the industrial aspects and the Chiomenti firm handling the legal side.
The government decided in December to privatize Alitalia, which has not reported an annual profit since 2002 and in 2006 accumulated additional losses of 380 million euros, after losing more than 221 million euros the previous year.
The initial bidders which did not make the short list were: the British private equity group Terra Firma Investments; the Virgin Islands-based investment firm Benstar-Saturn; Milan businessman Paolo Alazraki; the Italian pilots' association Unione Piloti; and Porcellana Castello, a northern Italian business consortium headed by the entrepreneur Terenzio Servetti.
The 11th bidder was Fabio Scaccia, a professor of aeronautics, who presented a bid as an "indignant protest" at the way Alitalia has been managed over the past decade.
