The European Commission is investigating some loans offered by the Italian government to Alitalia
Today, April 24, the European Commission announced that it has launched an in-depth investigation to assess whether Italy's loan to Alitalia complied with EU rules. This is a loan worth EUR 900 million, which was offered in 2 tranches.
Commissioner Margrethe Vestager, in charge of competition policy, said: "The European Commission has a duty to ensure that state loans, which are granted to companies in difficulty, are in line with EU rules. We will investigate the Alitalia case. "
Loans offered by the Italian Government to Alitalia
Alitalia is an airline owned 51% by Compagnia Aerea Italiana - CAI and 49% by Etihad Airways. He has been in financial difficulty for several years. On April 24, 2017, Alitalia staff rejected a cost reduction plan, and shareholders refused to provide additional funding. As a result, on 2 May 2017, Alitalia was placed under extraordinary administration under Italian bankruptcy law.
Being left without shareholder financing and under extraordinary management, Alitalia needed the support of the Italian government. In May 2017, Alitalia received a loan worth EUR 600 million. In October 2017, this loan was increased by another 300 million.
During this period, a tender procedure was initiated to find a buyer interested in Alitalia's assets.
The current opinion of the European Commission is that the state loan can be state aid. An in-depth investigation is underway to see if this loan complies with EU rules.
The Commission is concerned that the duration of the loan, which runs from May 2017 to the earliest in December 2018, exceeds the maximum duration of 6 months allowed for a rescue and restructuring loan. Moreover, the Commission has doubts as to whether the aid is limited to the minimum required.
The Commission will continue to investigate whether or not these initial concerns are well founded. The opening of an in-depth investigation gives all interested parties the opportunity to express their views on this measure.
There is a tense period for Alitalia. It remains to be seen what the European Commission will decide. If we recall, Malev went bankrupt and ceased his activity after the European Commission decided that the Hungarian operator would return the state aid. In the case of Malev it was 130 millions of EURO. In the case of Alitalia we are already talking about 900 million EURO.