July 10, 2020 / 9:45 AM / a month ago

Benettons to meet after government ultimatum on motorway contract

MILAN, July 10 (Reuters) - The boards of Benetton-backed Atlantia and its motorway business will meet on Friday to discuss measures demanded by the government to save a contract to run most of Italy’s highways, a person familiar with the matter said on Friday.

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

The government has brought to a head the two-year long dispute saying it wants a solution by the end of the week after rejecting previous proposals by Autostrade to reach a compromise.

Atlantia declined to comment on the board meetings.

To put a stop to proceedings to revoke the concession, Autostrade must submit a new proposal by the weekend detailing steps that include lowering tariffs and paying compensation to meet indications received from the government at a meeting on Thursday.

The Benetton family owns 30% of Atlantia which in turns owns 88% of Autostrade, the rest being in the hands of Chinese fund Silk Road and Germany’s Allianz.

Italy’s anti-establishment 5-Star Movement, a partner in the ruling coalition, wants the Benettons to loosen their grip on Autostrade after calling for the group to be stripped of its concession.

The ruling centre-left PD party has said it would favour a settlement to avoid legal disputes dragging on.

Two sources familiar with the matter have said the Benettons were ready to lower Atlantia’s stake in Autostrade below 50% through a capital increase that new shareholders could subscribe to.

Sources have previously said the government had drafted a plan under which infrastructure fund F2i and state lender CDP would split a majority stake in Autostrade.

By 0845 shares in Atlantia were up 3.4%.

Reporting by Stephen Jewkes in Milan and Giuseppe Fonte in Rome. Editing by Giselda Vagnoni and Jane Merriman

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