Alitalia tumbled in pre-market trade and its stock was suspended even before the market opened after news of its €1 billion share issue triggered fresh concerns for its future today.
The capital increase - priced at 80 cent per share and worth more than Alitalia's market capitalisation of roughly €800 million - will fund a broad restructuring and allow the Italian Treasury to cut its stake to below 50 per cent.
Alitalia had been set to open 10.4 per cent lower at €5.50. At 9am the stock was indicated down 15.42 per cent at €5.19 .
Alitalia's share offer will begin next week, running from November 14th to December 2nd.
The Treasury, Alitalia's largest shareholder, said yesterday it will buy €489.2 million worth of the shares.
Alitalia said that a consortium of banks, led by Deutsche Bank, would guarantee the rest of capital increase for €516.9 million.