Italy's bourse has suspended indefinitely trade in Alitalia after the government began a third attempt to sell the ailing carrier, and a report said a state loan to the airline may be illegitimate.
Italian newspaper La Repubblica reported on Wednesday the European Commission had decided Italy's 300 million euro ($468 million) emergency loan to Alitalia is illegal state aid and must be withdrawn. The spokesman for the Commission said he was aware of the report but did not have any comment.
"The Commission is still considering its analysis of the Italian proposal. Once that process is completed, a decision will be taken," spokesman Mark English said. He declined to give a date for the decision. No one at Alitalia was immediately available for comment. An EU source told Reuters that after its initial discussions on the matter, the Commission will likely open a formal probe - instead of take an immediate decision on whether the loan constitutes state aid or not - because of its complexity,
Such probes usually take a maximum 18 months to complete. The Commission is scheduled to discuss Alitalia on June 11 - which La Repubblica said was the date on which it would formally open a procedure against Italy.
The loan, granted in April by Italy's previous centre-left government, was aimed at keeping the airline flying while incoming Prime Minister Silvio Berlusconi tried to recruit a group of Italian investors to save it from bankruptcy.
Those investors did not materialise, meaning the airline's future is at risk if the loan is thrown out by the Commission. After the Commission's decision is announced, Italy will have 15 days in which to tell the EU executive how it intends to proceed, La Repubblica said.
Milan's bourse regulator Consob suspended trade in Alitalia shares, convertible bonds and other financial instruments until further notice on Wednesday. It had earlier said it was considering the move after the government introduced new measures aimed at selling the airline last week, and Alitalia's board had said on Tuesday it had "taken note" of the government's latest initiative.
Berlusconi's new conservative government launched the third attempt in 18 months to find a buyer for the airline, which loses more than 2 million euros a day. The bourse had for several weeks limited trading in the stock to a single daily auction. On Tuesday, it closed at 0.44 euros.