January 28, 2020 / 5:58 PM / 7 months ago

Atlantia shares rise on hopes for truce with Italian government

MILAN/ROME (Reuters) - Atlantia (ATL.MI) shares gained more than 6% on Tuesday as comments from a minister rekindled hopes that the infrastructure group could reach a compromise with the government over its lucrative motorway concession.

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

Speaking on Radio 24, Deputy Transport Minister Giancarlo Cancelleri, from the 5-Star Movement that has led calls for Atlantia to be stripped of its concession, acknowledged the government could decide not to revoke the license.

Cancelleri said he personally favored cancellation but that the government had not yet taken a decision.

Atlantia has been under pressure since August 2018 when a bridge operated by its motorway unit Autostrade per l’Italia collapsed in the port city of Genoa, killing 43 people.

Autostrade generates a third of Atlantia’s core profits and losing the concession would put the group, which has billions of euros in debt, under severe pressure.

The government is divided on revoking the concession, with the center-left Democratic Party (PD), which governs with 5-Star, more cautious on the issue, fearing a legal battle and potentially heavy compensation costs for the state.

“If the government changes its attitude (on the concession), the stock can only gain,” a Milan-trader said.

One PD minister said the party, whose position in government has been strengthened by 5-Star’s disastrous performance in regional elections at the weekend, preferred a tough contract revision to revoking the license.

They said one option being considered was a partial revocation covering a section of the tollway network, such as the area where the disaster occurred, and allowing the company to keep the rest.

LOOSENING GRIP

The new chief executive of Atlantia, which is controlled by the Benetton family, signaled a more conciliatory approach last week when he talked about the possibility of loosening the group’s hold on Autostrade to allow new investors in.

Asked whether Atlantia would be prepared to give up its majority stake in Autostrade or other units, CEO Carlo Bertazzo said: “Nothing is taboo. It depends on the quality of the partners and on the possibility of creating greater value with them.”

Offering to reduce its stake in Autostrade and allow state-backed investors in the motorway unit could be a way to mend fences with the government and break a standoff which has weighed on the shares for months, one analyst said.

A senior 5-Star source however was cautious about the prospect of finding a quick way out of the dispute.

“Letting new investors inside Autostrade is not a game changer that could make 5-Star retreat from its intention to revoke Atlantia’s concession,” the source said.

Additional reporting by Giancarlo Navach in Milan; Editing by Jan Harvey

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below