Atlantia investors see major losses with road concession at risk

MILAN: Atlantia SpA investors faced dramatic losses as bond-price declines accelerated and the stock failed to open after the Italian government began the process of revoking its toll-road concession in the wake of a tragic bridge collapse.

The stock was poised to drop 23% to 18, based on pre-market trading, from a closing price of 23.54 in Milan on Tuesday.

Atlantia saw some of its bonds fall to their lowest levels ever, while highways unit Autostrade d’Italia, the company that operated the Genoa bridge, also endured a selloff in its debt.

Atlantia’s 1bil of bonds due in July 2027 plunged below 88 cents on the euro yesterday, the lowest since they were issued, according to data compiled by Bloomberg.

The 700mil of notes due September 2029 issued by Autostrade fell below 88 cents on the euro, also a record.

The cost of insuring Atlantia’s debt with credit-default swaps soared 59 basis points on Wednesday to 174, a near five-year high.

Atlantia, whose biggest owner is Italy’s Benetton family, confronted government officials yesterday, saying political leaders’ comments that they would start the revocation process came prematurely, “without any verification of the material causes of the accident.”

Late Wednesday, Prime Minister Giuseppe Conte told reporters that the government would “start the procedure to revoke Autostrade’s licence.” He said officials wouldn’t wait for the outcome of a probe or a trial to take action.

The government may limit the licence-withdrawal to the A10 highway that includes the bridge, not the entire toll-road network run by Autostrade, according to a Transport Ministry official. — Bloomberg