Aeroflot walks out of Alitalia bidding
29 June 2007

Russia's carrier Aeroflot has withdrawn from the bidding for a substantial stake in Italian carrier Alitalia, saying it had been denied access to "critical information" about the firm's position.

Aeroflot said it had been unable to obtain "critical information with respect to the commercial and operational aspects of Alitalia's business".

This leaves a group led by Italian airline Air One the only declared remaining bidder for the stake in loss-making Alitalia, whose shares were suspended from trading after Aeroflot pulled out.

The number of bidders left in the fray were rival Italian airline Air One and Aeroflot after the withdrawal of a consortium led by Texas Pacific, after it announced earlier this month that it had joined British Airways in bidding for another European airline, Spain's Iberia.

Though Texas Pacific said that Alitalia had made a loss of €626 million ($841 million / Rs3,433 crore) last year uncertainty over the carrier's factual financial situation has clouded the entire bid process. A combination of industrial problems, fierce competition and poor cost control has left Alitalia financially drained and in need of fresh investment.

The Italian government wants to sell a minimum 39.9-per cent stake in Alitalia, it has said it would be willing to dispose of its entire 49.9-per cent holding.

The deadline had been extended by 10 days amid concerns about the status of the remaining suitors and their bids. The Italian government has now given interested parties until 12 July to make legally binding offers for its stake. The only stipulation is that the airline would retain its Italian identity and operations on its key routes.


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