Italy Panel Backs Revoking Autostrade Highway Concession

(Bloomberg) -- Italy's government took a preliminary step toward the possible unilateral revocation of a motorway concession held by Autostrade per l'Italia SpA after the deadly collapse of a bridge in Genoa last August.

A committee of the Italian Transport Ministry, in an advisory opinion, concluded that the company, controlled by the Benetton family's industrial arm Atlantia SpA, was in “non-fulfillment of custody and maintenance obligations” and that “these defaults have the character of gravity,” according to a document viewed by Bloomberg News.

Autostrade said in a statement on Monday that it hasn't yet received the committee's report and that the excerpts made public so far showed no serious breach of contract on its part. A representative of the Transport Ministry wasn't immediately available for comment.

The Rome government has charged that Atlantia didn't perform required maintenance on the Genoa bridge, and called for the company's right to run the motorway to be rescinded. Still, a unilateral revocation of concessions could cost Italy about 25 billion euros ($28.4 billion) in penalties and damages, people familiar with the matter have said. Autostrade has the authorization to run almost 3,000 kilometers (1,860 miles) of Italian toll roads.

Atlantia shares fell as much as 3.9% in Milan and were 3.6% lower at 22.08 euros at 11:28 a.m. The stock has declined about 10% since the bridge incident. The toll-road company's bonds also slumped on Monday, with its 10-year notes maturing in 2027 falling about 1.5 cents to around 96 cents, the biggest drop since Oct. 26.

The Aug. 14 collapse of the suspension bridge, one of the coastal city's main east-west arteries, killed 43 people and sparked a fierce reaction by Italy's populist government.

--With assistance from Tasos Vossos.

To contact the reporter on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Steve Geimann, Frank Connelly

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