The Italian government has taken a definitive step towards the privatisation of ITA Airways (AZ, Rome Fiumicino), green-lighting the sale of the newco that replaced Alitalia last October, local media reported.

The country’s Council of Ministers adopted a prime ministerial decree on February 11 “to start the process of finding a partner” for the 100% state-owned carrier, Finance Minister Daniele Franco declared at a news conference staged together with Prime Minister Mario Draghi.

“We do not have a schedule in which we predetermine the timing, but initially the Ministry of Economy aims to retain a minority and not a controlling stake in the company - a shareholding that can be sold at a later stage,” he outlined.

The decree does not name specific investors, a government source told Agence France-Presse, but Lufthansa (LH, Frankfurt International) and the shipping company MSC expressed an interest last month in acquiring a majority stake.

Despite MSC’s and Lufthansa’s request for a 90-day period of exclusivity in any negotiations, in principal ITA Airways must open up its data room of sensitive financial documents to all interested parties.

A financial source told AFP that ITA Airways is valued at EUR1.2 billion to EUR1.4 billion euros (USD1.35-1.6 billion). Rome invested EUR700 million (USD792 million) to kickstart the company in 2021. Two more injections of public funds are expected, by March 2022 (EUR400 million; USD452 million) and in 2023, to total EUR1.35 billion (USD1.5 billion) - but Italy would not have to make these payments if a sale is agreed.

Other suitors may emerge in the coming weeks. Competing groups IAG International Airlines Group, Lufthansa, and Air France-KLM with Delta Air Lines have all expressed a desire to become a partner for ITA, but some currently have more resources to do so than others.