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Last Updated: Tuesday, 5 December 2006, 14:16 GMT
Italy to sell stake in Alitalia
Alitalia plane
Any buyer will have to keep Alitalia's national identity
The Italian government has said it will sell 30.1% of the shares in national airline Alitalia, but with a string of conditions attached.

Any buyer of the stake must also make a bid for the rest of the airline, keep Alitalia's national identity and propose a plan to save the firm.

Loss-making Alitalia said recently it had begun exploratory talks with Air France-KLM on a possible alliance.

Air France has said any tie-up would involve restructuring Alitalia.

Air France-KLM has said privatisation and financial restructuring are prerequisites for upping its current small stake in Alitalia.

The sale of the stake in Alitalia is larger than expected. Last week the government said it planned to sell about half of its 49.9% stake,

Shares in Alitalia were suspended shortly before the Italian economy ministry said it would sell the 30% stake.

Another condition of the sale is that the bidder must maintain Alitalia's services in Italy as well as present a "turnaround plan" to save the firm.

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