June 18, 2020 / 3:17 PM / 23 days ago

Atlantia asks EU to intervene in concession row with Italy

MILAN/BRUSSELS (Reuters) - Infrastructure group Atlantia (ATL.MI) has asked the European Commission to intervene in a political dispute over its motorway concession, accusing the Italian government of breaching EU law in an escalating two-year row.

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

The future of the concession held by Atlantia’s motorway unit Autostrade per l’Italia has been in doubt since the bridge operated by Autostrade collapsed in 2018, killing 43 people.

The government introduced legislation earlier this year to drastically cut the compensation it will have to pay Autostrade if it revoked its motorway concession following alleged company shortcomings.

Atlantia, controlled by the billionaire Benetton family, said in a letter to Brussels that the new legislation had unilaterally modified the concession contract, cutting Autostrade’s value and damaging investors.

“This legislative initiative lacks any objective justification and appears to be merely for political ends,” Atlantia said in the letter seen by Reuters.

Atlantia added it had learned from media reports that the government wanted to force it to sell a majority stake in Autostrade to state-backed entities at a reduced price.

“We deem it of the utmost importance that the European Commission takes a prompt and firm initiative vis-à-vis the Italian authorities to tackle the reported breach of EU Law,” it wrote.

Atlantia owns 88% of Autostrade, with Germany’s Allianz (ALVG.DE) and China’s Silk Road fund holding the rest.

“A number of commissioner departments have received this letter. The commission services are now looking at the content. A reply will be sent in due course,” European Commission spokesman Daniel Ferrie said.

Since the bridge disaster, Italy’s ruling 5-Star Movement has threatened to strip the company of its concession.

But its governing partners, the centre-left Democratic Party and centrist Italia Viva, worry revoking the concession would cost billions in compensation to Autostrade, potentially embroiling the state in a legal battle.

“A revocation of Autostrade’s concession arbitrarily and in breach of the 2006 rules would indicate a lack of legal certainty in Italy and would frighten foreign investors,” said Andrea Scauri, asset manager at Lemanik.

Italian Prime Minister Giuseppe Conte said on Tuesday that a proposal by Atlantia to settle the dispute was not good enough and the dossier must be closed quickly.

Additional reporting by Foo Yun Chee in Brussels, Giselda Vagnoni and Giuseppe Fonte in Rome; editing by Giulia Segreti and Emelia Sithole-Matarise

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