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Italy’s Atlantia Seeks EU Support in Clash With Government

Italy’s Atlantia Seeks EU Support in Clash With Government

(Bloomberg) -- Top managers at infrastructure giant Atlantia SpA have appealed to the European Commission to urgently intervene in a clash with the Italian government, accusing Rome of weakening the company’s highway unit “for political ends,” according to the text of a letter seen by Bloomberg.

The letter sent last week, signed by Atlantia Chairman Fabio Cerchiai and Chief Executive Officer Carlo Bertazzo, marks an escalation in a long-running tussle between the Benetton family-owned holding, which controls toll-road operator Autostrade per l’Italia SpA, and the government of Prime Minister Giuseppe Conte.

The managers’ letter to Commission Vice President Valdis Dombrovskis says “prompt European Commission intervention” is a matter of urgency. “The survival of the company itself” is at stake, it says.

Negotiations between the government and the Benettons to resolve the dispute over toll-road licenses are at an impasse, with little sign of a solution ahead of an end-June deadline.

Conte has threatened to strip Autostrade of its highway concession in the wake of a deadly 2018 bridge collapse, though he’s aware this could start a long and potentially costly litigation process.

A spokesman for the Commission confirmed that the letter is currently being examined and a reply will be sent in due time.

A spokesman for Atlantia declined to comment on the letter. Conte’s office and the Transport Ministry did not immediately reply to requests for comment. The Financial Times reported earlier Thursday on the letter.

Measures taken by Italian authorities are harming Autostrade, the highway sector and investors, according to the letter, calling the situation “a serious violation of the principles of business freedom and internal market rules.”

Credit Ratings

Atlantia has taken issue with rule changes approved by the government which cut financial penalties for revoking concessions. They charge that the new rules hurt Atlantia and Autostrade’s credit ratings.

In the letter, the company’s managers also accuse the government of cutting off access for Autostrade, also known as Aspi, to state guarantees that help firms cope with the impact of the coronavirus.

“This is patently discriminatory, confirming the Italian authorities’ desire to compromise Aspi’s viability, weaken the company and reduce its value for political ends,” the letter states.

While Atlantia has said it would welcome a new minority stakeholder, Italian state infrastructure fund F2i SGR SpA has been pushing to acquire control, with state lender Cassa Depositi e Prestiti SpA also possibly taking a stake, according to people familiar with the talks.

The letter also denounces a reported government proposal to have Atlantia sell its majority stake in Autostrade to Cassa Depositi, known as CDP, and other funds. That plan, reported by several Italian news organizations, has not been officially confirmed.

“The government itself is trying to force Atlantia to sell its majority stake to state-owned CDP at a reduced value, creating significant damage to thousands of Italian and foreign investors,” the letter said.

June 30 is the last day Autostrade can hand back its license and sue the government, following the government’s changes to concession rules late last year.

Conte will have to balance the demands of his coalition partners, with the anti-establishment Five Star Movement eager to show that those responsible for the bridge accident have been punished and the Democratic Party wary of potential economic impact.

©2020 Bloomberg L.P.