Etihad Airways (EY, Abu Dhabi International) and Alitalia (AZA, Rome Fiumicino) will conclude a EUR560million (USD756million) investment agreement on August 8 Italian Minister of Infrastructure and Transport, Maurizio Lupi, has announced.

With the Emiratis having accepted an Alitalia board proposal last week, Lupi said the long-awaited deal was now ready to be finalized if only for a few outstanding issues which should be resolved before the August 8 signing.

"There are still some details to agree on. But a date has been set for the signing - August 8. Over the next week we'll work to fix the last details," he told the ANSA newswire.

According to Italy's Corriere della Sera newspaper, Etihad will acquire a 49% stake in the struggling Italian carrier for EUR560million. Among the conditions laid down for the investment are the laying off of 2'174 employees from Alitalia's 14'000 strong labour force including 1'590 ground staff, 129 pilots, 420 flight attendants, and 35 Air One (Rome Fiumicino) staff.

This week, Lupi said the establishment of Alitalia's new 51% shareholder, Midco, will be formalized. Midco is the intermediate company between Alitalia's old holding and the new company that will be formed once Etihad's investment is formalized. The vehicle will allow Alitalia's existing debt to be retained in the existing company while allowing current investors to invest in the new firm, which will be debt free.

Alitalia's board is to push its shareholders to approve a EUR300million capital increase to help shore up the airline's finances until the Etihad deal is completed. Last week, shareholder Poste Italiane announced it would participate to the tune of EUR65million.