May 22, 2020 / 5:36 PM / 12 days ago

Atlantia fights its corner on state-backed loan

MILAN (Reuters) - Benetton-backed Atlantia (ATL.MI) has hit out at comments by a member of government calling for its motorway unit to be barred from a state-backed loan needed to prop up business, a move that could stoke an ongoing row over its motorway concession.

FILE PHOTO: A logo of the Atlantia Group is seen outside its headquarters in Rome, Italy August 31, 2018. REUTERS/Alessandro Bianchi/File Photo

The company said it would ask its lawyers “to evaluate all the actions necessary... in view of the serious damage being caused” the group and to its Autostrade per l’Italia unit.

Autostrade is in talks for a state-guaranteed loan worth up to 1.25 billion euros to weather the fall in motorway traffic triggered by the coronavirus crisis.

A representative of the ruling coalition 5-Star Movement, which has been pushing for Autostrade’s highway concession to be revoked ever since a bridge it operated collapsed and killed 43 people, said the loan guarantee should not be given.

“You have the right to ask, and to answer is a courtesy. NO, thanks,” Deputy Industry Minister Stefano Buffagni wrote in a post on Facebook on Wednesday.

While waiting for the state-backed loan, Autostrade could use a 900 million euro ($980 million) credit line granted by its parent company to cope with “serious financial tensions”, Atlantia said on Friday.

Rome approved a decree in April offering state guarantees on up to 400 billion euros in new bank loans.

The emergency legislation allows the Treasury to introduce additional requirements, and 5-Star wants Rome to use this option to impose draconian conditions on the company, one party source told Reuters.

It remains to be seen whether the centre-left PD party, which governs with 5-Star, will back its coalition ally in trying to block the loan.

Autostrade’s executives will meet with the Treasury next week to discuss the state-backed loan, a third source said.

In addition to Autostrade, three other companies controlled by the Benettons are interested in state-backed loans, bringing the total potential requests to more than 1.8 billion euros.

Disagreement over the group’s request for state-backed funds has reignited tensions with Rome over the potential revocation of it motorway concession.

Atlantia also complained the government had not yet replied to a 2.9 billion euro proposal filed by Autostrade at the start of March to end the row over the concession.

“This situation has caused, and continues to cause, serious damage to the group as a whole and has given rise to concern among investors,” it said.

Additional reporting by Stephen Jewkes, Elisa Anzolin; Editing by Leslie Adler

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