Italy Urges Autostrade to Make Offer in Concession Clash

(Bloomberg) -- Italian Prime Minister Giuseppe Conte urged highway operator Autostrade per l’Italia SpA to make an offer to his government to ward off the possibility of losing its lucrative concession.

The issue is plaguing Conte’s fragile coalition, with partners including the anti-establishment Five Star Movement and the small Italy Alive party of ex-premier Matteo Renzi split on how to deal with the Benetton family-owned Autostrade, a unit of Atlantia SpA that’s the operator of more than half of Italy’s toll roads.

Autostrade’s custodianship of Italian highways has been a hot-button issue since a deadly 2018 Genoa bridge collapse.

“The government would have a duty to consider a proposal from Autostrade,” Conte told reporters on his arrival at a European Union summit in Brussels, but only if it “offers the possibility of safeguarding the public interest more efficiently than revocation.”

Conte said the government has no intention to compromise, nor is it making a proposal in negotiations underway.

Conte spoke following a report in daily la Repubblica Thursday that the Benetton family rejected what was described as a “final” deal from the government on changes to its contract in a bid to ward off a full revocation.

Atlantia is open to selling “even a majority stake” in Autostrade, CEO Carlo Bertazzo said in an interview with Corriere della Sera on Friday. A revocation of the concession deal would be catastrophic, the CEO said, leading to a default on some 10 billion euros ($11 billion) in bonds.

The government on Wednesday won initial approval in the lower house of parliament for a law that makes it cheaper to strip companies of public concessions, a move that will give it more leverage in talks to resolve the clash with Autostrade.

The new rules would significantly reduce the penalties Italy would have to pay in case of revocation. In Autostrade’s case, potential compensation would fall to as little as 6 billion euros from more than 20 billion euros.

The government’s legal adviser sees a high risk of litigation if Italy revokes the Autostrade concession, Il Sole 24 Ore reported Friday.

--With assistance from Alberto Brambilla.

To contact the reporter on this story: John Follain in Rome at jfollain2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Jerrold Colten, Marco Bertacche

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