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Alitalia needs a few weeks to close Etihad deal: CEO

ROME (Reuters) - Alitalia needs a few weeks to seal a deal with Etihad which could see the Abu Dhabi airline invest 560 million euros ($762 million) in its struggling Italian peer in return for hefty job cuts, Alitalia chief executive Gabriele del Torchio said.

"I am confident ... that we will finish the agreements in a few weeks," Del Torchio said in Rome's Senate on Monday.

Del Torchio said Etihad, which already has stakes in Air Berlin and Aer Lingus, was proposing to invest up to 560 million euros in Alitalia, which was kept flying by a government-engineered 500 million euro rescue package last year.

Italy's government is keen to find a cash-rich partner for the flag carrier, but the process has been delayed by disagreement over how to restructure the airline's debt of around 700 million euros, and wrangling over layoffs.

Talks with Alitalia's banks are at an advanced stage, Del Torchio said, hours after Intesa Sanpaolo, which is both a creditor and one of the airline's main shareholders, said it would consider selling its stake but not before 2017.

Asked whether the company hoped to be able to present a draft agreement with banks at a board meeting on Friday, Del Torchio said: "We are working towards this."

Alitalia will have to cut 2,200 jobs to meet Etihad's conditions, Del Torchio said. The layoffs will be "structural", meaning workers leave the company rather than taking advantage of a state-backed temporary furlough scheme.

"Etihad's management is adamant about this," he said.

Alitalia, which employs 14,000 people, was once a national icon whose staff wore uniforms designed by Giorgio Armani, but is now seen as a symbol of the country's economic malaise.

Sources have said Etihad was looking to buy around 49 percent of Alitalia.

($1 = 0.7345 Euros)

(Reporting by Alberto Sisto Writing by Isla Binnie; Editing by Mark Potter)

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