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Last Trade - 30/12/19

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
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Revenue £1.29bn
Position in Universe th / 737

Italy pushes on with plans to reform motorway concession rules

By Giuseppe Fonte and Francesca Landini
    ROME, Dec 24 (Reuters) - The Italian government is pressing
ahead with measures to make it easier and less costly to revoke
concessions to operate motorways, even though one party in the
ruling coalition opposes this, top officials said on Tuesday.
    The measures would potentially open the way for the
government to end the concession held by Atlantia  ATL.MI ,
whose subsidiary Autostrade per l'Italia (ASPI) was the operator
of a bridge that collapsed in Genoa last year, killing 43
people.  urn:newsml:reuters.com:*:nL8N28V0CF
    Atlantia, which is controlled by the Benetton family, has
always denied wrongdoing over the Genoa disaster and said it
spent more on maintenance of the motorway network than required
by its contract.
    At the end of a late night meeting on Monday, the ruling
coalition signed off on a rule that considerably reduces the
amount the government must pay to a toll road company if a
concession is revoked due to shortcomings on the part of the
operator. 
    The rule, which is part of a broader decree, also states
that state-owned road company ANAS will temporarily manage the
motorways if an operator has its concession revoked.
    In an interview with daily Il Messaggero on Tuesday, Prime
Minister Giuseppe Conte said the new rule eliminates an unfair
advantage for Atlantia, adding that a decision on the revocation
of the concession would be taken in January.
    "There is no alarm for the concessions sector: those who
have made investments, even in the event of contract breach,
will be able to recover the amounts for the costs incurred,"
Conte said. 
    "However, it will no longer be possible to apply favourable
rules such as those invoked by Atlantia, which even in the event
of a serious breach would involve a compensation of tens of
billions (of euros)... I will not allow it."
    The ruling 5-Star Movement has repeatedly called for the
company to be stripped of its concession. More than 70 former
and current employees of Atlantia and its subsidiaries are under
investigation in relation to the Genoa disaster. 
    Within the coalition, the centre-left Democratic Party
(PD)also backs the new rule, but the small centrist Italia Viva
party, led by former Prime Minister Matteo Renzi, continues to
oppose it, saying it would scare away foreign investors. 
    Italia Viva's votes are needed to maintain the government's
parliamentary majority, so it remains to be seen whether the
rule will be passed when the decree is due to be approved in
both houses early next year.
    The coalition is also divided over whether to end Atlantia's
contract outright. 
    A PD minister, speaking on condition of anonymity, told
Reuters the decree was intended to force Autostrade to accept a
revision of the concession, which expires in 2038.
    Proceeds from the concession account for around one third of
Atlantia's core profits and guarantee several billions of debt
issued by ASPI.
    A source close to ASPI warned the company would go bankrupt
if the government revoked its concession without compensation.
 urn:newsml:reuters.com:*:nL8N28X2TK 
    ASPI said in a statement on Sunday the new rule risked being
in breach of the Italian constitution if it results in
unilaterally revoking a contract by one of the parties involved.
The company said it might take legal steps to protect itself and
warned it could seek multi-billion-euro compensation from the
state.

 (additional reporting Stefano Bernabei; editing by Gavin Jones
and Jane Merriman)
 ((francesca.landini@thomsonreuters.com; +39 02 66129437;
Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))
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