UPDATE 1-Atlantia scraps interim payout as concession fears linger

(Recasts, adds share price reactions, details)

MILAN, Nov 8 (Reuters) - Italian infrastructure group Atlantia said it would not pay an interim dividend on Friday in a blow to investors concerned that its motorway business might lose its concession after a deadly bridge collapse in Genoa last year.

Shares in Atlantia initially fell on the news that there would be no interim divided from the Benetton family controlled company, but closed up 0.8% at 22.80 euros.

Atlantia is still grappling with the political and judicial fallout of the collapse of a bridge operated by its Autostrade per l’Italia unit which killed 43 people.

Italy’s government has threatened to revoke the motorway concession, Autostrade’s main asset, which accounts for a third of Atlantia’s core profits, but it is unclear when any decision on this will be taken.

An inquiry into the collapse is ongoing, along with another into allegations of a cover-up on the state of other bridges.

Atlantia also scrapped its interim dividend last year, but paid 0.90 euros per share on its 2018 results.

“The market was expecting the interim dividend, and there was also a very wide range of between 0.65-1.5 euros per share for the total (2019) coupon ... they can still distribute it next year,” a Milan broker said.

Atlantia said on Friday its earnings before interest, tax, depreciation and amortisation (EBITDA) was 5.7 billion euros ($6.29 billion) in the first nine months, in line with the average estimate for five analysts polled by Reuters.

On a pro-forma basis, excluding the impact from the acquisition of Spanish motorway group Abertis last year, Atlantia’s core earnings rose 1% year-on-year.

Atlantia is in talks with state-owned railways Ferrovie dello Stato for a potential investment in troubled airline Alitalia, which analysts have said could ease tensions with the government in Rome. ($1 = 0.9068 euros) (Additional reporting by Giancarlo Navach; Editing by Alexander Smith)