By a decree of the Italian Ministry of Economic Development (MISE) on 2 May 2017 the extraordinary administration procedure set forth by legislative decree No. 347/2003 (“Legge Marzano”) was started for Alitalia Società Aerea Italiana S.p.A., which has also been declared insolvent by the Court of Civitavecchia on 11 May 2017

Two extraordinary administration procedures for Alitalia While the extraordinary administration procedure started in 2008 for Alitalia Linee Aeree Italiane S.p.A. and other companies of the group (inter alia Alitalia Airport S.p.A., Alitalia Servizi S.p.A. and Alitalia Express S.p.A.) is still pending before the Court of Rome, a new extraordinary administration procedure has now been started before the Court of Civitavecchia for a different company (Alitalia Società Aerea Italiana S.p.A., hereafter “Alitalia SAI”) which purchased the business within the procedure of Alitalia Linee Aeree Italiane S.p.A. and became itself insolvent.

A quick overview on the extraordinary administration procedure Extraordinary administration is an insolvency procedure aiming to the preservation of the going concern of large insolvent companies: for these reasons it is different from bankruptcy liquidation (it should be noted that, if the extraordinary administration procedure’s aims cannot be attained, it can be converted into bankruptcy). Extraordinary administration consists of two different phases (i) the proof of debt and payment of creditors, which is entrusted to the Court following rules very close to those applicable in bankruptcy and (ii) the continued operation and the restructuring of the business, entrusted to the Commissioners appointed and directed by the MISE. During the procedure the Commissioners will prepare the special reorganization business plan set forth by Art. 27, second para., lett. a, b and b-bis of Legge Marzano, providing alternatively for (a) the sale of the assets or (b) a financial and economic reorganization of the Company or (b-bis) the sale of assets and contracts on the basis of a business plan providing for continued operation of the business for no more than one year (this applies only to companies – such as Alitalia SAI – active in the essential public services sector). The extraordinary administration procedure is governed by legislative decree No. 270/1999 (so-called “Prodi-bis”) and by Legge Marzano which provides for certain special provisions applicable to the “special” extraordinary administration procedure, to which only largest companies are eligible, such as Alitalia SAI.

Alitalia SAI’s extraordinary administration procedure The MISE appointed a panel of Commissioners: Luigi Gubitosi, Enrico Laghi and Stefano Paleari. The Court of Civitavecchia appointed Luigi Bianchi as the Judge in charge of the procedure. With a further decree on 12 May 2017, the MISE joined Alitalia Cityliner S.p.A. into the Alitalia SAI’s extraordinary administration procedure. With law decree No. 55 of 2 May 2017, the Italian Republic granted a six month – 600 million euro bridge loan to Alitalia SAI in order to support the continued operations of the business. The loan enjoys a super-priority ranking senior to all other super-priority creditors. The same law decree provides that the Commissioners publish a solicitation for non-binding offers for the purposes of the plan to be prepared by the Commissioners. The first hearing to review proof of debt filings by creditors is scheduled for 17 October 2017, with a deadline of 120 days from the publication of the declaration of insolvency by the Court (falling then on 8 September 2017) for the filing of proofs of debt with respect to receivables as of 2 May 2017. Filings shall be made to the certified e-mail address which will be indicated by the Commissioners.

Effects of the procedure for suppliers As a consequence of the operation of the business by Alitalia SAI led the Commissioners, contracts with suppliers will continue to be regularly performed and all receivables for supplies made after 2 May 2017 will enjoy super-priority status. Payment of receivables of key suppliers arising from supplies made before 2 May 2017 can be authorized by the Judge, if he finds that the payment prevents a material prejudice to the company’s business or to the value of the company’s estate. Reciprocal claims existing as of 2 May 2017 can be set-off between individual suppliers and Alitalia SAI. According to Art. 50 of the Prodi-bis, the Commissioners are entitled to terminate contracts, should they consider their performance as not useful for the purposes of the procedure.