Italian government cool on latest Atlantia concession offer - sources

By Giuseppe Fonte and Francesca Landini

ROME (Reuters) - The Italian government is holding off on responding to an offer by Atlantia <ATL.MI> to cut its holding in motorway unit Autostrade per l'Italia below 50% to resolve a dispute over its operating licence and wants the group to go further, two sources said.

Atlantia, controlled by the prominent Benetton family, has been locked in a dispute with the government over its motorway concession since a bridge it operated in Genoa collapsed in August 2018, killing 43 people.

With the government threatening to revoke the concession, last week the infrastructure group wrote offering to cut its 88% stake in Autostrade to under 50%. It has so far received no answer, the sources, who have knowledge of the matter but spoke on condition of anonymity, said.

The government remains sceptical about Atlantia's intentions and wants it to agree also to tariff cuts and bigger investments, a government source said.

After some contacts, the two sides are again deadlocked as the government presses ahead with ratifying rules making it easier to strip Atlantia of the lucrative concession, the two sources said. Ratification is expected by the end of the month.

The ruling coalition, which has struggled to reach a common position among its different partners, would not backtrack on either a new tariffs mechanism or new rules for the concession, the government source said.

"Italy's transport ministry has drafted some proposals and is ready to discuss them, but for now it does not see a concrete willingness by the company to negotiate," the source said.

The government is avoiding engaging in formal negotiations, one of the sources said, adding the new motorway rules would materially reduce the value of its Autostrade unit as they cut the value of compensation from the government in case of revocation.

There is a risk that a state-backed company buys a stake in Autostrade at an unfair price, according to the source.

The company wrote to the European Commission last month to complain about the new rules.

One source said it was considering renewing its request to the European Commission to review the rules, once the decree receives parliamentary approval. A spokesman for Atlantia said the company was not considering a fresh appeal to Brussels.

Revoking the concession would be a complicated and expensive process but remains a powerful potential threat that has allowed Rome to step up pressure on Atlantia, which relies on motorways for a third of its core earnings.

(Additional reporting by Stephen Jewkes and Stefano Bernabei; Editing by James Mackenzie and David Holmes)