Benettons' toll road sale at crossroads

 

Ramesh Kumar in Greater Noida

It is troubled times for the Benetton dynasty of Italy. There are challenges in the East: Coup-hit Myanmar has forced Benettons to pause business, just like Sweden's H&M. That's on the fashion retail business side. 

Back home, Benettons face another hiccup. How many of us know this Italian dynasty's infra build business? There are also into the toll road network trade. 

The August 2018 Morandi bridge collapse in Genoa that killed 43 lives has led to an uneasy relationship with the state. That issue remains unresolved till today.

When the Italian government privatized the toll road network in 1999, Benettons jumped into the fray and control half of Italy's toll roads. It has 3,000 km under its umbrella. 

Autostrade per l"Italia - popularly known as ASPI - is Benetton's toll network under the company called Atlandia. 

Benettons' desire to exit ASPI is nothing new post-Morandi bridge collapse. ASPI is being valued at 10 bn euros. London-based Hedge Fund TCI has a 10% stake in Atlantia and ASPI has 88%. Italian government's investment fund is one of its suitors as part of a consortium consisting of Blackstone and Macquarie. 

Spanish construction group ACS is another suitor for ASPI. ACS is owned by Spain's richest man Florentino Perez. Significantly, ACS is also a business partner in Abertis, part-owned by Atlantia. Perez is also the president of Real Madrid, the renowned football club in Spain besides his huge toll road network business across the world. So he is already well versed in the toll road business and therefore a perfect fit to take control. 

The hitch is political. The key question is whether The new Italian prime minister Mario Draghi who replaced  Giuseppe Conte will pursue state activism? That is, will he follow the renationalization agenda of Conte? Not to be forgotten is ACS is a Spanish company. Therefore, a foreign business enterprise. Should an Italian business enterprise be handed over to a foreigner, though a close European neighbor? 

ASPI contract for the Italian toll road network expires in 2038. Perez has a 5 billion Euro bonanza from the sale of one of his industrial businesses. So where to park is his agenda. 

Building infrastructure is easier than maintaining the same. So there is a huge interest to close the lingering ASPI issue. Punters at the Milan stock exchange are anxiously watching the parleys. Will the state-led consortium be outbid the Spanish suitor? 

Benetton's would prefer a quick closure so that the Morandi bridge collapse will be delinked from their corporate basket. The new government's focus today is on tackling Covid and the recovery of the Italian economy. Where exactly the ASPI toll road sale sits in Draghi's laundry list is a mystery. 

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