The shareholders of Alitalia – Compagnia Aerea Italiana S.p.A. are scheduled to cast their votes for the approval of the €500 million bailout plan proposed by the board of directors on Monday evening, October 14. Alitalia is the leading passenger transport group in Italy.

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According to The New York Times, it is still uncertain whether Air France-KLM (OTCMKTS:AFLYY) (EPA:AF), the largest shareholder of the company, will support the proposed bailout plan. Air France-KLM owns 25% of Alitalia.

Last Friday, Air France-KLM (OTCMKTS:AFLYY) (EPA:AF) gave its permission to the board of Alitalia to create an emergency plan to maintain its operations, but the French Dutch Airline did not indicate how much money it will contribute to revamp the Italian carrier.

Alitalia unanimously approved the €500 million bailout plan

The board of directors of Alitalia unanimously approved the €500 million bailout plan which includes a €300 million capital increase by offering stock options to shareholders and a €200 million new line of credit from the banking system and confirmation of existing lines of credit.

Based on the proposal, Poste Italiane, the post office owned by the state, agreed to acquire €75 million worth of shares not yet purchased by Alitalisa’s existing shareholders, while Sanpaolo and UniCredit also agreed to buy €100 million worth of shares. In addition, Banca Intesa Sao Paolo will grant abridge equity worth €100 in order for Alitalia to meet its financial needs.

Italy’s Prime Minister Enrico Letta supported the bailout plan on Monday. He defended the government’s decision to get involved in saving the Italian carrier against critics. He said, the investment of Poste Italiane in Alitalia is “not protectionism, but a step to go into negotiations with international partners particularly Air France-KLM (OTCMKTS:AFLYY) (EPA:AF), which is the first negotiating partner.

Letta added, “I can understand the critics.” According to Letta, Italy’s goal is “to have a big international group, without any protectionism.”

Shares of Air France-KLM declined by 2%

Daniel Solon, an independent airline analyst in Barcelona opined, “Air France management have got to be looking at this very, very cautiously. It’s tricky for them both financially and politically.”

Shares of Air France-KLM (OTCMKTS:AFLYY) (EPA:AF) declined by 2% during midday trading in Paris on Monday, down by nearly 1% after hours in the OTC Markets in New York.