The privatization of Alitalia formally took off on Friday with an invitation from the Treasury for bids for no less than 30.1% of the national carrier and all convertible bonds in the state's possession.
The invitation, which expires on January 29, was posted on the Treasury's website and will soon be published in the Italian and international press.
By acquiring over 30% of the airline, potential buyers will by law be obliged to make a public offer for all Alitalia shares on the market.
The Treasury currently holds 49.9% of Alitalia and may sell all of it if the right offer is made.
The convertible bonds held by the Treasury include 62.5% of the 714-million-euro issue made in 2005.
Aside from the stake held by the state, 33.229% of Alitalia is on the stock market, 9.951% is held by Walter Capital Management, 4.918% by Newton Investment Management and 2.002% by Norges Bank.
The Treasury's invitation for bids is open to persons or companies, Italian or foreign, which have consolidated capital assets of no less than 100 million euros.
The bids must include a detailed business plan which the Treasury said must be in line with the government's goal of correcting the company's finances and allowing for its future development.
The plan must also seek to protect employment levels and guarantee adequate service throughout the country.
The Treasury added that it was imperative that those who acquire a controlling stake in the airline retain this quota for the time necessary to complete the proposed business plan.
Alitalia's future owners will also be obliged to maintain the airline's national identity and guarantee the quality and quantity of services offered.
All bids must be submitted to the Treasury's financial advisor, Merrill Lynch International, which will then draw up a short list of potential buyers who will be asked to formalise their bids.
The official invitation for bids boosted Alitalia shares on the Milan stock exchange where by noon price up over 5% and 5.5% of the airline's stock capital changing hands.
In an appearance before parliament earlier this month, Economy Minister Tommaso Padoa-Schioppa explained that the government decided to privatize Alitalia because the airline "must be totally run as a regular business and according to the rules of business".
The decision to sell, he admitted, was also a recognition "of the state's lack of success as a stockholder and as a regulator. It was unable to guide the airline's transition from a state monopoly to a company able to compete in the open market".
Alitalia's current crisis, Padoa-Schioppa observed, "is the result of a number of causes, from political interference to union fragmentation and unrest".
Alitalia has not reported an annual profit since 2002 and has warned that total losses for this year could exceed its 2005 losses of more than 221 million euros.
