July 15, 2020 / 10:35 AM / a month ago

Italy takes control of motorways as Benettons yield on Atlantia

ROME (Reuters) - Italy will bring thousands of kilometres of roads back under state control after the powerful Benetton family agreed to give up its stake in Atlantia’s motorway unit (ATL.MI) to avoid the threatened cancellation of its lucrative operating concession.

FILE PHOTO: A logo of the Atlantia Group is seen outside their headquarters in Rome, Italy August 31, 2018. REUTERS/Alessandro Bianchi/File Photo

The deal, reached after talks that ran through the night, opens the way to settling a bitter dispute set off by the collapse of a bridge run by Atlantia’s tollway unit in the northern city of Genoa in 2018, killing 43 people.

Under the deal, Cassa Depositi e Prestiti, a state lender, and allied investors will take a 51% stake in Atlantia’s Autostrade per l’Italia unit, which operates around 3,000 km (1,850 miles) of Italy’s highway network, prior to an eventual spin-off and listing.

The CDP’s entry into Autostrade would come through a capital increase diluting Atlantia’s 88% stake in Autostrade. The unit would then be spun off with the Benettons selling their holding to the CDP and other new investors over the next 12 months.

Germany’s Allianz (ALVG.DE), France’s EDF and China’s Silk Road Fund hold the rest of Autostrade.

“The government has affirmed a principle, that was trampled on in the past, that public infrastructure is a precious public asset,” Italian Prime Minister Giuseppe Conte said in a statement.

Atlantia shares shot up by some 25% on Wednesday as the deal averted a direct revocation of the motorway concession, a move that would have triggered a default on around 10 billion euros of Autostrade debt and destabilised Atlantia.

The Benettons owns 30% of infrastructure group Atlantia, which also controls airport operator ADR and digital toll payment business Telepass.

The Morandi bridge disaster, which highlighted the dire state of much of Italy’s crumbling infrastructure and exposed chronic negligence and mismanagement by the operators shocked the country, fuelling calls for radical change.

Conte said the deal would have to be confirmed in a “clear and transparent” agreement to ensure the threat of revocation was taken off the table.

A source close to the Benetton family said the deal, hammered out between Atlantia Chief Executive Carlo Bertazzo and Economy Minister Roberto Gualtieri, “was done with a pistol to the head but it’s better than any alternative.”

It also appeared to defuse a growing political row between the main partners in Conte’s fragile coalition, the anti-establishment 5 Star Movement and the centre-left Democratic Party (PD) as well as the smaller Italia Viva centrist group.

Leading 5 Star Movement politicians had been pushing for the Benettons to be stripped of the lucrative concession and had clashed with the PD and Italia Viva, which said revocation would incur potentially huge costs while putting jobs and the operation of the motorways at risk.

Additional reporting by Stephen Jewkes and Angelo Amante; Writing by James Mackenzie; Editing by Toby Chopra

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