RPT-EXPLAINER-Stripping Italy's Atlantia of motorway concession may not be easy

(Repeats story from Wednesday with no changes to the text)

MILAN, Jan 8 (Reuters) - Leading members of Italy’s ruling 5-Star Movement have called for Atlantia’s motorways unit to be stripped of its concession following the deadly 2018 collapse of a bridge it operated in the northern city of Genoa.

The collapse of the Morandi bridge, which killed 43 people and laid bare the dire state of Italy’s crumbling infrastructure, drew accusations of deliberate cover-ups by Atlantia, which is controlled by the Benettons, one of Italy’s richest families.

The anti-establishment 5-Star Movement, has accused the Benettons of putting profits before safety and pushed for measures to make it easier and cheaper for the government to terminate the contract.

But removing the concession will not be straightforward and 5 Star’s demands have caused strains with its coalition partners, the centre-left Democratic Party (PD) and the smaller centrist Italia Viva group.

They warn that cancelling the concession operated by Atlantia’s Autostrade per l’Italia (ASPI) would cost billions of euros in compensation and undermine Italy’s credibility with international investors.


ASPI is Italy’s largest motorway operator, managing around 3,000 km of highway. Any move to cancel its concession could trigger a prolonged legal battle, with the company arguing that changing the contract retroactively would be unconstitutional.

The government recently passed measures that would cut the likely compensation in the event of a contract revocation from 15-20 billion euros ($16.7-22.3 billion) to some 8 billion euros. But even the reduced figure would pressure Italy’s badly strained public finances.


ASPI, which accounts for a third of Atlantia’s core earnings and employs 7,000 workers in Italy, says it could also face bankruptcy, forcing the government to take over the concession and potentially billions of euros in debt.

ASPI has around 9.5 billion euros of debt that it would be unable to repay without the concession. The debt is partly guaranteed by Atlantia, which has 5.7 billion euros of its own debt that could also be threatened if ASPI went under.

A part of ASPI’s outstanding bonds worth around 4 billion euros, according to analysts’ calculations, is also covered with a put option that would allow bondholders to seek early repayment in case of revocation of the motorway concession.

Bondholders include the European Investment Bank, Italy’s state-owned Cassa Depositi e Prestiti and the country’s two biggest banks UniCredit and Intesa Sanpaolo.


Appia Investments Srl -- an investment vehicle owned by Germany’s Allianz, France’s EDF Invest and fund management company DIF Capital Partners -- holds a stake of around 7% in ASPI. China’s Silk Road Fund, which has 5%, would also be hit.

In addition, Singapore’s sovereign wealth fund GIC holds 8% of Atlantia. ($1 = 0.8965 euros) (Reporting by James Mackenzie and Francesca Landini Editing by Keith Weir and Kirsten Donovan)