Italy PM meeting with allies fails to break Atlantia deadlock - sources

A meeting between Italy's Prime Minister Giuseppe Conte and coalition allies on Wednesday to try settle a row over Atlantia's motorway business yielded no progress, two government sources said. Fresh talks on the matter are expected soon, the two people added, without giving a precise date.

Conte is expected to comment on the matter after markets close on Wednesday, one of the sources said. The ruling, anti-establishment 5-Star Movement pledged to strip Autostrade per l'Italia of its lucrative concession to run motorways after the deadly collapse of a bridge it operated.

The centre-left PD party, which governs with 5-Star, has been reluctant to deprive Autostrade of its concession, fearing it could lead to a large compensation claim against the state. A resolution to the issue could clear the way for a 1.25 billion-euro ($1.37 billion) state-guaranteed loan which Autostrade has applied for to weather the coronavirus crisis.

The request for help during the virus pandemic triggered criticism last week from 5-Star members who are against the state guaranteeing funding to Atlantia, led by the Benetton family. 5-star wants either a revocation of the concession or Atlantia to reduce its 88% stake in Autostrade so that the Benetton family loses control of the motorway operator, a party source said.

The government would back acquisition of a relevant stake in Autostrade by infrastructure fund F2i and state lender CDP, the government sources said. However, a third source close to the matter told Reuters that CDP was unwilling to take a stake in Autostrade before the dispute with the government was settled.

Shares in Atlantia closed up 3.7% at 15.09 euros. ($1 = 0.9124 euros)