June 28, 2019 / 10:07 AM / 7 months ago

Italy's Di Maio says Arcelor, Atlantia are 'blackmailing government'

MILAN (Reuters) - Italy’s industry minister has accused two big companies - transport group Atlantia and steelmaker ArcelorMittal - of trying to blackmail the government, escalating a war of words which big business says could scare investors.

FILE PHOTO: 5 Star leader and Italian Deputy Prime Minister Luigi di Maio presents his EU election program in Rome, Italy, May 2, 2019. REUTERS/Yara Nardi/File Photo

Thousands of jobs could be at risk if the government followed through on threats to punish the two groups in the name of workers.

Atlantia (ATL.MI), controlled by Italy’s Benetton family, risks losing its domestic motorway concession, which accounts for a third of its core profit, after the deadly collapse of a motorway bridge it operated in Genoa.

ArcelorMittal (MT.AS) has warned it could be forced to close the Ilva plant after Rome on Thursday scrapped the legal immunity granted by previous governments to ease a purchase of the ailing southern Italian plant - which has the largest production capacity in Europe - by the steel group.

Industry Minister Luigi Di Maio, leader of ruling 5-Star Movement, was sharply critical of both companies.

“If somebody wants to side with Atlantia or with Arcelor Mittal which are ... blackmailing the state and asking for legal immunity when (in the case of Arcelor) they are threatening to close the (steel) plant I stand with the workers and we will never side with multinationals that blackmail the state,” he said in a video posted on his Facebook account.

On Thursday Di Maio said the government was set to revoke Atlantia’s concession, adding the group was an undesirable partner for troubled flagship carrier Alitalia.

ArcelorMittal’s European head, Geert Van Poelvoorde, reacted with disbelief to the government about face on the immunity, while Atlantia said on Thursday it reserved the right to take legal action to protect its reputation after Di Maio’s remarks.

The government is desperate to save Alitalia and there has been intense speculation that Rome could try to mend its relations with Atlantia in exchange for the company’s help in rescuing the loss-making airline.

Alitalia employs 11,6000 workers, with more than 8,000 people currently working at the Ilva plant in southern Italy.

Italian industry lobby Confindustria said the handling of both Atlantia and ArcelorMittal cases by the government could damage the credibility of the country.

Silvia Rovere, CEO of Morgan Stanley SGR, the group’s asset management unit in Italy, told Reuters the country needed foreign investments and had to provide a safe environment.

“Investors arrive but then the rules change or there is uncertainty in their application ... we can’t afford it,” said Rovere, who is also the head of Italy’s association of real estate companies.

“The country has low growth and very high debt, and we need both domestic and international investors to buy our (public) debt and invest in our projects.”

Additional reporting by Giuseppe Fonte in Rome; editing by David Evans

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