ATL Atlantia

By Eric Sylvers 

The Benetton family, one of Italy's most famous business dynasties, bowed to political pressure to surrender its most valuable asset, the company that runs much of the country's highway network, as a belated consequence of the deadly collapse of a bridge in Genoa in 2018.

The Benettons agreed on Tuesday night to cede control of toll-road operator Autostrade per l'Italia SpA to a government-owned bank. Autostrade must also pay EUR3.4 billion ($3.9 billion) to compensate victims of the Genoa disaster and cover the cost of building a replacement bridge. The government expects the Benettons' family-controlled holding company, which currently owns 88% of Autostrade, will exit the business entirely.

Tuesday's agreement ends a standoff that began when the Morandi Bridge in the port city of Genoa collapsed in August 2018, killing 43 people. The bridge, built in the 1960s, was under management by Autostrade. The decay of steel cables that held up a 700-foot section of the bridge probably led to its collapse, according to civil engineers. Prosecutors are still investigating to firmly establish the cause and who was to blame.

Italian populist parties including the 5 Star Movement, which is part of the current Italian government, have demanded for two years that Autostrade be stripped of its license to manage the country's lucrative highway system.

But Italy's finance ministry, controlled by the centrist Democratic Party, warned that revoking a major public contract without proof of culpability could land the government in a court battle ending in a hefty compensation bill.

Prime Minister Giuseppe Conte thus brokered a compromise that involves leaving Autostrade as highway operator while pushing out the Benettons as the major shareholder.

Autostrade has said it always met its obligations to invest in maintaining the road network, and that the bridge collapse wasn't its fault. The Benetton family has said it had no direct control over how Autostrade is run and shouldn't be blamed for the tragedy. That hasn't kept the Benettons from becoming political pariahs for some people in Italy.

Shares in the family-controlled holding company Atlantia SpA, which is publicly listed, rose about 25% on Wednesday as the deal with the government lifted the specter of the heavily indebted Autostrade having its license revoked and potentially falling into bankruptcy.

The Benettons became globally famous for their clothing business, but diversified into other sectors including infrastructure as their namesake apparel brand declined. The clothing company has fallen on hard times as it struggles to carve out space between fast-fashion behemoth Zara and more high-end Italian labels such as Armani. But investments in Autostrade and other businesses via the Atlantia holding company have helped make the Benettons one of Europe's richest business dynasties.

The family's growing reliance on government contracts and perceived closeness to Italy's political establishment have made them targets for antiestablishment parties. Both the governing 5 Star and the nationalist League, Italy's biggest opposition party, have accused the Benettons of milking public-sector contracts for profit while investing too little. The Benettons have said Autostrade took part in public tenders, along with other companies, that outlined how much would have to be spent on road maintenance.

Political pressure on the Benettons rose again in December last year, when a highway tunnel run by Autostrade suffered a partial ceiling collapse. The incident, which prompted the company to agree to an independent check of all the tunnels it operates, didn't cause any injuries but again highlighted the poor state of maintenance of the Autostrade network and more generally of Italy's infrastructure.

Autostrade also operates large parts of the toll-road networks of France, Spain, Brazil and Chile, as well as smaller concessions in several more countries and territories, including Puerto Rico.

Write to Eric Sylvers at eric.sylvers@wsj.com

(END) Dow Jones Newswires

July 15, 2020 08:51 ET (12:51 GMT)

Atlantia (BIT:ATL)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024

Atlantia (BIT:ATL)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024