MILAN (Reuters) – Atlantia controlled by Benetton ATL.MI is offering to give up majority ownership of its motorway unit as part of a proposal to resolve a dispute with the Italian government over its motorway concession, two sources familiar with the matter said.
In exchange for cutting its 88% stake in its Autostrade per l’Italia unit, Atlantia is asking the government for reassurance that it will be allowed to retain the contract to operate around half of Italy’s toll roads, indicated the sources.
The group also wants guarantees that any changes to the formula used to calculate tolls do not impede Atlantia’s ability to make investments by excessively reducing revenue, one of the sources said.
Atlantia’s board has authorized senior company executives who are in contact with the government to propose lowering the stake in Autostrade below 50% subject to conditions set by the company being met, the two sources said.
Atlantia and the government have been locked in a bitter row over the potential early termination of the group’s highway concession since a bridge operated by Autostrade collapsed, killing 43 people, in August 2018.
Autostrade, whose minority shareholders are the German insurer Allianz ALVG.DE and China’s sovereign wealth fund Silk Road, generates nearly a third of Atlantia’s core revenue from the highway concession.
The bridge disaster sparked public outrage and repeated threats from Italy’s ruling coalition member, the 5 Star Movement, to strip Autostrade of its motorway concession.
Autostrade has been accused of poor road maintenance and is being investigated for the bridge collapse.
Autostrade has denied any wrongdoing.
The government is however divided on the early termination of the Autostrade concession, and some members of the ruling coalition seem open to discussions with the group.
By loosening its grip on Autostrade, Atlantia could make room for a state-backed investor in the highway unit, like state lender CDP or infrastructure fund F2i, giving the government more control. on highway investment and maintenance, analysts said.
A major obstacle to a deal between the government and the company is finding a compromise on the value of Autostrade, they said.
edited by Valentina Za and Cynthia Osterman