October 3, 2019 / 6:09 AM / 11 days ago

Atlantia's request for overhaul of Alitalia plan draws government anger

ROME/MILAN (Reuters) - Benetton-led Atlantia SpA (ATL.MI) raised government hackles on Thursday after saying it would not be able to press ahead with plans to rescue flagship carrier Alitalia as long as the risk of losing its motorway concessions hung over it.

FILE PHOTO: A view of the Alitalia Airbus A330-200 plane ahead of Pope Francis' departure from Fiumicino Airport to begin his visit to the African nations of Mozambique, Madagascar and Mauritius, in Rome, Italy September 4, 2019. REUTERS/Remo Casilli/File Photo

Atlantia, which runs Italian motorway group Autostrade per l’Italia, is part of a group of investors led by the Italian railways backing a possible rescue of the loss-making airline.

But on Thursday a source close to the matter said Atlantia had sent a letter to Italy’s Industry ministry asking it to radically revise its Alitalia plan if talks were to go ahead.

“On Alitalia we won’t give in to blackmail from anyone,” Industry Deputy Minister Stefano Buffagni said on the sidelines of a conference, when asked about the letter.

In the letter Atlantia managers said the continuing risk of losing the motorway concessions meant the company would not be able to invest in Alitalia due to concerns about resources and the safeguard of its shareholders.

Atlantia has previously said it is ready to invest in the airline with Italian railways and U.S. carrier Delta Air Lines Inc (DAL.N) providing the plan guaranteed stable returns in the long term.

The letter - parts of which were published on the website of Italian daily La Repubblica on Thursday and confirmed by the source close to the matter - said Atlantia’s advisers had given a negative opinion on the Alitalia rescue deal.

“I think we all need to work together to make things work well,” Buffagni, a leading figure in the anti-establishment 5-Star Movement, said.

The ruling coalition 5-Star has been campaigning for almost a year to scrap the Benetton group’s concession, blaming Atlantia for a bridge collapse that killed 43 people on its toll network in Genoa last August.

Atlantia, which makes around one-third of its core earnings from its Italian motorway business, denies accusations it neglected maintenance on the bridge.

Reporting by Stefano Bernabei in Rome, Gianluca Semeraro and Elvira Pollina in Milan; Writing by Stephen Jewkes; Editing by Valentina Za and Matthew Lewis

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