The auction for a controlling stake in ITA Airways by the Italian government suffered a setback on Tuesday, according to local media. Only two groups submitted proposals to take 80% of the company, the association between Lufthansa and the maritime operator MSC, and a partnership between the Certares fund and Air France-KLM.
The Italian Ministry of Economy was not satisfied with the first offers, between 800 million and 1 billion euros, and gave a new deadline for competitors to rethink their proposals, which expired at 23:59 on 5 July.
However, offers would have been reduced, according to sources at Corriere della Sera, which attributed the change to the rising price of a barrel of oil and the prolongation of the war in Ukraine.
Lufthansa and MSC originally intended to offer up to €1.4 billion for the ITA, but the first bid was €1 billion. In the new round, the two companies would have presented a maximum value of 850 million euros.
The US fund Certares was even more restrained, with a maximum bid of €600 million, compared to €800 million previously.
The decision of the government of Italy does not only involve the highest value, but also other aspects such as the governance of ITA Airways. In this regard, Air France-KLM would be at a disadvantage because of the debts the company has with the European Union government and which prevent it from making investments.
The proposals must be evaluated by the Italian Treasury with the advice of two companies. Only then will they be sent to Prime Minister Mario Draghi, who will make a decision.