for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

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: The collapsed Morandi Bridge is seen in the Italian port city of Genoa, Italy August 16, 2018. REUTERS/Stefano Rellandini/File Photo

The deal, reached in the early hours of Wednesday morning, 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.

Atlantia shares shot up by some 25% as the deal averted a direct revocation of the motorway concession with the almost certain default on around 10 billion euros of Autostrade debt and a consequent destabilisation of Atlantia.

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

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

The CDP’s entry into Autostrade would come through a capital increase that would dilute Atlantia’s 88% stake and see 33% of the unit going to the CDP. Another 22% would be sold directly to private investors selected by the government, four sources with knowledge of the matter said.

One of the sources said the cash call could be worth 3.2-3.3 bln euros, potentially valuing Autostrade at around 10 billion euros, compared with 15 billion in 2017 when Atlantia sold a 12% stake to Allianz ALVG.DE and China's Silk Road Fund.

Related Coverage

The Benettons would sell their holding to the CDP and other new investors over the next 12 months. Blackstone and Macquarie are among funds that have expressed an interest, sources said.

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.

Atlantia declined to comment.

“PISTOL TO THE HEAD”

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 Italy, fuelling calls for radical change.

As the largest shareholders in Atlantia, which also controls airport operator ADR and digital toll payment business Telepass, the Benettons had become the focus of intense pressure. A source close to the family said the deal “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 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 and Jane Merriman

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up