EMEA: News Analysis: Atlantia scenarios after Genoa bridge disaster

21 August 2018 - 12:00 am UTC

Just how damaging and far-reaching could Atlantia’s connection to Italy’s tragic bridge collapse prove to be, ask William Cain and Alessandra Castelli 

A stock price decline of 23% in the week since the Genoa Bridge disaster has wiped almost EUR 5bn from Atlantia’s market value. And there’s plenty at stake for the infrastructure specialist which generated more than two-thirds of its revenue and profitability from Italian motorways in 2017.

Following the Italian government announcement that it intends to revoke the A10 motorway concession from one of its units, Atlantia said last Thursday (16 August) that the “modality of such announcement may have impacts on the Atlantia shareholders and bondholders”.

The Italian company also said the announcement had come before it received any official complaints and before the causes of the disaster were established.

An infrastructure lawyer spoken to by analysts at Inframation’s sister title DealReporter said there are two scenarios under which Atlantia could be stripped of the A10 contract. The first is if urgent work is required and the state needs to step in to complete it. The second is if Atlantia is found to have failed to have maintained the asset.

In the event of a premature end to the contract, Atlantia would also be entitled to a termination payment set off against the value of any damages the project vehicle suffered.

Also, there’s the prospect of fines. Penalties of up to EUR 150m can be levied on Atlantia, according to a Reuters report citing Italy Transport Minister Danilo Toninelli. The minister also said that Atlantia’s toll unit Autostrade per l’Italia would have to contribute to the cost of the bridge reconstruction.

The lawyer said there’s no doubt, given the number of fatalities, that there will also be a criminal investigation. It’s too early at this stage to determine who was to blame for the bridge collapse, the lawyer added. Atlantia had been criticised in the past for delaying upgrades to the bridge, the lawyer said, but equally, Atlantia had claimed these delays were caused by issues outside of its control, like obtaining the correct legal permits.

Transport Minister Toninielli has already called for the resignation of management in Atlantia’s Autostrade per l’Italia unit, which runs five separate motorway networks across Italy spanning some 3,000km.

Pressure on a Ministry of Transport investigation into the incident could also be applied by the Interior Ministry, the lawyer added, representatives of which visited the site on 15 August.

Matteo Salvini, head of Italy’s Ministry of the Interior, threatened that Atlantia should be stripped of its license to operate the country’s highways, Bloomberg previously reported. Italian motorways represented more than two-thirds of Atlantia’s EUR 5.5bn operating revenue and EUR 3.4bn of EBITDA in 2017.

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