Italy moves to settle Autostrade fight after all-night talks

Prime Minister Giuseppe Conte’s government set a course to nationalize controversial toll-road operator Autostrade Per l’Italia SpA after all-night talks on the politically charged issue.

Italy’s economy and infrastructure ministers were asked to hammer out the details of a proposal from Autostrade that would see state lender Cassa Depositi e Prestiti take control of the company from Atlantia SpA, owned by the billionaire Benetton family.

Tensions over Autostrade have tested Conte’s hold on his coalition government. The anti-establishment Five Star Movement had insisted on revocation of the concessions or a full Benetton exit from Autostrade, while the center-left Democratic Party wanted the state to take a stake in the company.

The collapse of the 1960s-era Morandi Bridge in Genoa remains a vivid national tragedy, killing 43 people in August 2018 as cars and trucks plunged onto rail tracks and streets below. A ministerial commission argued that Autostrade underestimated the deterioration of the structure. The company rebuffed those claims, saying it followed the law and its safety checks triggered no alarms.

Autostrade’s bonds due 2023 gained the most on record on Wednesday. The bonds rose 7.5 cents on the euro to 98 cents, the highest level since February, according to data compiled by Bloomberg.

Since the bridge drama, Atlantia had lost more than 50% on the Milan stock exchange, with a value of 9.5 billion euros ($10.8 billion) as of the close on Tuesday. The shares surged 20% at the open on Wednesday.

The future of the toll-road operator and its owner was at stake in the dispute. If it lost its concessions, Autostrade had warned it could default on debt, which would in turn put Atlantia at risk.

Autostrade is 88% owned by Atlantia, which is controlled by the billionaire Benetton family through its 30% stake in the listed holding company. Allianz SE and China’s Silk Road bought a minority stake in the toll-road operator in 2017.

Under the plan, Autostrade will agree to pay compensation of 3.4 billion euros related to the bridge collapse, which sparked the move to revoke its license. The deal also includes a reduction of tariffs, increased penalties for further safety violations and an agreement to waive legal claims related to the reconstruction of the bridge. Atlantia will spin off Autostrade and the unit on the stock exchange.

The deal also foresees the complete exit of the Benettons from Autostrade through a capital increase taken up by CDP and direct sales of stakes to investors. If the agreement isn’t fully implemented, the government will revoke Autostrade’s concession to operate toll roads in Italy, the cabinet said in a statement on Wednesday.

The accord was reached after a seven-hour cabinet meeting in which various proposals from Autostrade were evaluated. Conte, whose ruling coalition is split over how to deal with the Benettons, had threatened to pull the licenses from Autostrade unless the family fully exits the company. Late on Tuesday, the toll-road operator presented an eleventh-hour offer to the government.