Etihad Seals $2.4 Billion Deal to Buy 49% of Ailing Alitalia

Etihad Airways PJSC signed a 1.76 billion-euro ($2.4 billion) deal to purchase 49 percent of Alitalia SpA, giving the Gulf company access to one of Europe’s biggest travel markets and providing a lifeline to Italy’s unprofitable former flag-carrier.

Etihad will invest 560 million euros in Alitalia, while existing core investors have approved a 300 million-euro capital increase and Italian financial institutions will supply the same amount in new loans. Some 598 million euros of short- and medium-term debt will also be restructured. The Italian company will seek to become profitable by 2017, said James Hogan, the Abu Dhabi-based company’s chief executive officer.