Atlantia unit eyes govt guarantee scheme to fight virus impact – sources – Metro US

Atlantia unit eyes govt guarantee scheme to fight virus impact – sources

FILE PHOTO: A logo of the Atlantia Group is seen
FILE PHOTO: A logo of the Atlantia Group is seen outside its headquarters in Rome

MILAN (Reuters) – The motorway unit of Italian infrastructure group Atlantia <ATL.MI> is considering tapping government-backed liquidity to temper the impact of coronavirus on its business, two sources with knowledge of the matter said on Monday.

Two weeks ago Rome approved emergency measures offering large companies the chance to ask export agency SACE to guarantee bank loans provided they refrained from approving dividend payments for a year.

Atlantia controls motorway unit Autostrade per l’Italia, which runs a highway network of more than 3,000 kms in Italy and ADR, which operates Rome’s Fiumicino and Ciampino airports.

“Autostrade will likely ask for SACE guarantees,” one of the sources said.

The guarantee scheme will help the Autostrade weather the drastic fall in motorway traffic triggered by the health emergency.

The scheme will also help ease fallout from credit rating downgrades to junk status the unit recently suffered because of uncertainty over its motorway concession.

Autostrade had a debt of around 10 billion euros at the end of last year.

Benetton-led Atlantia has been locked in a dispute with the government over Autostrade’s concession after a bridge it operated collapsed in August 2018, killing 43 people.

After months of tension, Atlantia and the Transport ministry are now engaged in informal talks in an effort to end the stalemate and mothball the possibility of an early revocation of Autostrade’s concession.

“Contacts between Atlantia and the ministry continue … the government does not intend to withdraw the concession but there is not yet any formal agreement,” one of the sources said.

The source added that the Atlantia will scrap the dividend on its 2019 results.

Atlantia and Autostrade declined to comment on the issue.

The sources said both Atlantia and Autostrade would press on with the approval of its 2019 results next week after a delay decided in March, when the uncertainty over the future of the concession was higher.

Autostrade per l’Italia said last month it had reached an agreement with unions to put its total 4,700 employees under a temporary lay-off scheme for nine weeks with a rotation that will involve 1,500 jobs a time.

(Reporting by Francesca Landini and Stephen Jewkes; editing by David Evans)