Wednesday, December 7, 2022

Talks to get underway to settle fate of Benettons’ Italian motorway contract

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Benetton-backed Atlantia was set to begin decisive talks with the Italian government on Thursday about a long-running political dispute that could cost it a lucrative contract to operate many of the country’s motorways.

Rome has been threatening to revoke the toll road licence held by Atlantia’s Autostrade per l’Italia subsidiary since a bridge it operated in the port city of Genoa collapsed in 2018, killing 43 people.

On Wednesday, Prime Minister Giuseppe Conte said he wanted a solution by the end of this week, at the latest.

Sources said Autostrade managers would be meeting government representatives on Thursday afternoon to see if it was possible to reach an agreement, with the government seeking compensation, tougher tariff rules and shareholding changes for the company to keep its contract.

The talks will follow an Atlantia board meeting, one source said.

Atlantia declined to comment.

“The meeting (with the government) will have the flavour of an ultimatum for the Benettons. They have to understand revocation is on the table,” a government source said, asking not to be named.

Atlantia was dealt a blow on Wednesday after a top Italian court ruled that a law excluding Autostrade from reconstruction work on the Genoa bridge was not unlawful.

That implications of that decision will be discussed at the board meeting, the source said.

The ruling coalition has struggled to find a common position on Atlantia’s future role, with the anti-establishment 5-Star Movement calling for its licence to be revoked and the centre-left PD urging caution, fearing a hefty compensation claim against the state.

Sources have told Reuters that Rome wants Atlantia to cut its 88% stake in Autostrade to below 50% to reduce the influence of the Benetton family which owns 30% of Atlantia.

It also wants Atlantia to accept tougher rules on motorway tariffs and pay 3.4-billion-euros ($3.85 billion) compensation for the Genoa disaster.

Atlantia, which has always denied any wrongdoing in the bridge collapse, says it has never received any formal proposal from the government.

Autostrade generated around 13% of Atlantia’s core earnings last year and at 1243 GMT Atlantia shares were down 5.3%.

In a newspaper interview on Thursday deputy transport minister Giancarlo Cancelleri, a 5-Star member, warned of a government crisis if the coalition could not agree on how to settle the dispute over the next week.

Autostrade, which counts among its investors German insurer Allianz and China’s Silk Road Fund, manages around half of Italy’s motorway network under a concession contract due to end in 2038.

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