Alitalia could attract renewed TPG interest if airline declared insolvent


MILAN (Thomson Financial) – U.S. private equity fund Texas Pacific Group (TPG) could be interested in Alitalia SpA again, if the company is declared insolvent, said TPG partner Vincenzo Morelli, responsible for TPG European investment.

In an interview in Saturday’s Milano Finanza, Morelli said Alitalia’s situation has deteriorated since it was first put up for sale by the government at the start of last year, and that TPG was interested.

‘While there is life, there is hope. Certainly, however, the Alitalia of today is no longer that of a year and a half ago when the sale process was started,’ he said in the interview.

‘It has a lot less passengers, does not have the means to resolve its situation on its own and whoever buys it will have to make a lot of investments with uncertain returns,’ he said.

He added: ‘I believe that it is difficult for Alitalia to overcome its situation without going through a form of insolvency, that means an administration or a preventative agreement.’

Morelli said Alitalia has debts of 1.5 billion euros and is losing at least 1 million a day, while a year ago it had 800 million in cash.

Last week, the Italian government, which owns 49.9 percent of Alitalia, agreed on a 300 million euros bridging loan to keep the airline afloat while the incoming government seeks a buyer for the airline.

In the interview, Morelli said that according to basic financial principles, Alitalia can’t pay its debts and the only solution is insolvency and re-launch of the parts that are profitable.

‘I don’t seen an alternative. In this case, we (TPG) would be able to think again and return if it interests us,’ he said.

Last week, Air France-KLM (nyse: AKH – news – people ), the only company to have made a binding offer to link up with Alitalia, withdrew its bid.

Incoming prime minister Silvio Berlusconi says he preparing a consortium of Italian businessmen to take over Alitalia, saying at the end of last week it would take some months to buy the airline.

Russia’s Aeroflot is studying an interest in Alitalia, while Deutsche Lufthansa AG (other-otc: DLAKY.PK – news – people ) said it is not interested.

Sunday’s La Stampa said Alitalia trade unions are due to meet possible members of Berlusconi’s consortium on Tuesday, though it cited various union representatives declining to confirm this.