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Alitalia: new procedure for establishment of Newco Alitalia

Measures for air transport contained in Legislative Decree no. 104/2020 ("August")

Since Government decided in March of last year, in full closure due to the spread of the Covid-19 pandemic, to proceed with nationalization of Alitalia in AS, it is third time that we have seen a profound review of methods and procedures. set up the Newco and start the related activities. First of all, as part of the process of converting art. 79 of the so-called DL Cura Italia, subsequently with art. 202 of the so-called Relaunch Decree and, most recently, with the new provisions of art. 87 of the so-called August decree.

Recent changes

Latest relevant changes consist in:

  • It’s possibile to establish a new society with 100% control of Finance ministry or a society with a public shareholding, just before getting authorization of European Commission before proceeding with the elaboration of the industrial plan. Only this operation of the company and no longer the constitution of the Newco will remain linked to the Commission's assessments.
  • First endowment of the Newco share capital of only 20 million euros to be able to proceed with the elaboration of industrial plan. Remuneration of the chosen consultants (studio Grimaldi, Deloitte and Oliver Wyman ) remains with the Ministry of Economy, which has a spending limit of 300 thousand Euros for 2020, although competence in drafting the industrial plan is formally provided, and therefore also in the choice of support consultants, both of the Board of Directors of the Newco;
  • Further state contributions are essentially excluded, within the estimated budget of 3 billion Euros, until authorization is obtained from the European Commission. Initial constitution of the Newco remains hypothetically possible through a direct participation of the ministry (20 million) and a further and not limited participation of another company with predominantly public participation, even indirectly, despite the final provisions of paragraph 4 of art. 79 of the Legislative Decree so-called Cura Italia, as amended by art. 202 of the Relaunch Decree;
  • Establishment of one or more subsidiaries or investee companies of Newco for the management of the individual branches of activity and for the development of synergies and alliances with other public and private entities, national and foreign, as well as the purchase or lease, also for negotiation direct business of company branches of companies holding air transport licenses issued by ENAC, also in extraordinary administration, can be envisaged as part of the industrial plan but these are events and passages that are all substantially subordinated and conditioned to the assessments of the European Commission and therefore, in fact, potentially subsequent.

Expected steps

Procedure takes on more operational cut as the following phases are now foreseen:

  • Immediate establishment of the Newco Alitalia with a specific decree of the Minister of the Economy in agreement with the other competent ministers with which the bylaws will be defined,   the corporate purpose, the initial share capital and any other element necessary for the constitution and functioning of the company and the corporate bodies will be appointed and the criteria for their remuneration will be defined. The Government has been working for months on the constitution of the Newco which could take place as early as the current month of August or in the first weeks of September;
  • Approval of the business plan by the Newco Board of Directors within thirty days from the date of incorporation. The industrial plan, as already envisaged in the so-called Relaunch Decree, must provide for the development and expansion of the Newco offer, which includes structural product strategies;
  • Sending the industrial plan to both the European Commission and the Chambers, hypothetically by October;
  • Formulation of motivated but not binding opinions by the competent parliamentary committees within a peremptory term of 30 days from the assignment date, after which such opinions will be ignored;
  • Any subsequent additions or amendments to the business plan, taking into account the decision of the European Commission;
  • Completion of the purchase or lease project of the individual branches of Alitalia in AS and the possible establishment of one or more subsidiaries or participating companies for the development of synergies and alliances with other public and private entities;
  • The start of the air transport business only after having obtained the evaluations and the positive judgment of the European Commission, it is hoped within the current year.

The possibility therefore remains immediately to be able to start the purchase and / or lease of the individual company branches of Alitalia-SAI and Alitalia Cityliner in as, or even of Air Italy in liquidation, in order to start the air transport business. . frozen, obviously having to wait for the essential and prior positive authorization, possibly conditional, from the European Commission, which technically, at best, cannot be received before November 2020 except in the following months.

Main and extremely complex obstacle remains that of demonstrating a substantial discontinuity between the old Alitalia in AS and the new Alitalia in order to obtain the positive authorization for the operation from the European Commission pursuant to the specific regulations in force on aid for State for the rescue and restructuring of non-financial companies in economic difficulty.

Attachment at the bottom of this AVIONEWS article 87 of the August decree

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AVIONEWS - World Aeronautical Press Agency