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Italy Government Sets Aside EUR893 Million For AZ

Fri Apr 12, 2002 7:16 pm

Thu Apr 11,12:23 PM ET

ROME -(Dow Jones)- The Italian government said Thursday it has authorized the Economy Ministry to inject up to EUR893 million into troubled flagship airliner Alitalia (I.ALI) as part of an already-planned EUR1.43 billion recapitalization.

Last month, the board of Alitalia approved a recapitalization - a key element of an industrial plan which the company presented in the fallout from the Sept. 11 terrorist attacks on the U.S. which hurt the already struggling airliner.

Alitalia said the recapitalization wouldn't affect the Economy Ministry's 53% stake.

The government said in a statement the capital increase aims to reach the financial targets of Alitalia's 2002-2006 strategic plan.

The cash injection is subject to review by the E.U. Commission which has strict rules governing state aid.

Alitalia previously said it is "confident" the cash injection and the recapitalization plan doesn't represent illegal state aid. But in order to get the cash, it first must fulfill strict Commission-imposed conditions, including cutting routes, grounding planes and slashing thousands of jobs

In 1997, the Commission authorized a capital injection of EUR1.42 billion in Alitalia, payable in three installments.

Italy won't cut the majority stake it holds in troubled flagship airliner Alitalia SpA (I.ALI) until December 2003 , the government said in a statement late Tuesday.

The main news about AZ network are:

increasing in the number of flights to Tokio from 5 to 10 per week and to Osaka from 3 to 5 per week.