Air France-KLM won't take part in Alitalia cap increase - paper

Reuters

PARIS (Reuters) - Air France-KLM (PAR:AF) will not participate in a capital increase at battered airline Alitalia on Friday, Le Figaro newspaper reported, echoing a similar report in La Tribune two weeks ago.

It did not cite sources in the report published on its website on Monday.

Air France, contacted by Reuters, declined comment.

The possibility of the Franco-Dutch airline participating in the capital increase has seemed increasingly remote after the company wrote down the value of its existing 25 percent stake to zero on October 31.

Alitalia has not made a profit for more than a decade, hurt by competition from low-cost carriers and high-speed trains.

Alitalia shareholders have until midnight Thursday to decide whether or not to participate in Alitalia's 300 million euro ($402 million) cash call.

If Air France-KLM refuses to participate, its 25 percent stake will fall automatically to 11 percent.

La Tribune newspaper first reported on October 31 that Air France-KLM would almost certainly not take part in the capital increase.

Air France-KLM gave its approval for the share issue along with Alitalia's other investors in October, but is not obliged to participate and has always said it would attach strict conditions before giving any help.

Air France-KLM Chief Executive Alexandre de Juniac said last month his company was "not here to put money into a company that cannot last for the long term".

($1 = 0.7459 euros)

(Reporting By Alexandria Sage; editing by David Evans)

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