Francesca Landini & Giuseppe Fonte

ROME, (Reuters) – The Italian government hopes to close a deal to sell state-owned carrier ITA Airways before mid-June according to two people familiar with the matter.

ITA replaced Alitalia with its October takeover. The 75-year-old Alitalia, once a symbol of Italian style, glamour, and fashion, has been permanently grounded by ITA.

MSC Shipping Group and Lufthansa Germany have both expressed interest in purchasing a majority of ITA. Rome adopted a market-based approach to ensure that the door is open to all potential suitors.

One source said that Prime Minister Mario Draghi’s government wants to have a deal for privatisation in place by the beginning of summer. The sources did not want to identify the source due to the sensitive nature of the issue. Draghi’s Office declined to comment.

A government decree that came into effect early in the month states that Rome intends to privatize ITA via a direct sale of a public offering, while retaining a minor, non-controlling share at a first stage.

Last week the Treasury picked Equita and Gianni & Origoni as financial and legal advisers, intensifying efforts to find strategic partners.

A third source confirmed that the ministry had given the directive to advisers to look at the expressions and suitors for the carrier, as well as shortlist those who would be permitted to enter the data rooms.

Rome may inject as high as 1.35 Billion Euros ($1.51 Billion) to the carrier under an agreement with EU. This is up until 2023. The state would be less likely to provide financial assistance, which will reduce costs for taxpayers.

The treasury received 700 million euros in its first tranche last year. The Treasury is scheduled to add 400 million euros to its reserves in April. Next year, it will be able inject 250 million euros.

Alitalia has tried unsuccessfully in the past to form alliances with Air France, and more recently Gulf carrier Etihad.

Delta Air Lines Inc. (NYSE:) stated last week that it wants to strengthen commercial ties with ITA Airways, but is not looking at an equity stake.

($1 = 0.8967 euros)