Italy woos UAE funds on Alitalia

The Italian government has spoken to sovereign wealth funds from the United Arab Emirates about the possibility of investing in struggling airline Alitalia, a senior adviser to Prime Minister Enrico Letta said on Tuesday.

Fabrizio Pagani, Letta's senior economic adviser, said Alitalia appeared to be looking for a partner outside Europe, following Air France-KLM's decision not to take part in a capital increase and allow its 25 percent stake to be diluted to just 7 percent.

He said he had been to the United Arab Emirates to discuss the situation with sovereign wealth funds. "We spoke about investments in the broadest sense possible," he said.

Italian media reports have previously mentioned Etihad Airways as a potential alternative foreign backer for Alitalia, but the Abu Dhabi-based company declined to comment.

Sources close to the matter said, however, that Etihad had no interest in investing in the Italian carrier.