Retelit shares fall after government exercises ‘golden powers’

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    MILAN (Reuters) – Shares in Italian fiber-optic network group Retelit (LIT.MI) closed down 4.6 percent on Friday after the new government exercised its so-called ‘golden powers’ on a company deemed of strategic national importance.

    In its first measures since taking power, Italy’s anti-establishment coalition demanded that Retelit safeguard its network – beefing up investments if necessary – and keep its management and security operations in Italy.

    The government, backed by the 5-Star Movement and the far-right League, has unnerved investors with pledges to ramp up spending, slash taxes and row back on a market-friendly pension reform.

    One senior banker speaking on condition of anonymity said the move over Retelit had been seen in financial circles as fresh evidence of an anti-market stance by the new executive.

    Retelit said in a statement it was already compliant with the requests so it would not have to bear any additional costs or to alter the way it operates.

    Shareholders in Retelit have battled for control of the company which owns 12,500 km of fiber-optic cables.

    A group led by German activist fund Shareholder Value Management (SVM) on April 27 appointed the current board, keeping CEO Federico Protto in his job, defeating a rival slate of board nominees backed by investor consortium Fiber 4.0, which had called for a change of management.

    Fiber 4.0 had sought unsuccessfully to block the April 27 vote saying that – based on golden power rules shielding strategic companies – SVM should have notified the government of the accord struck with Libyan investor Bousval and German fund Axxion AXX.SN over 24.4 percent of Retelit’s capital.

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    The government has also applied its golden powers over the purchase of unlisted group Next Ingegneria dei Sistemi by Defence Tech Holding, it said late on Thursday without providing further details.

    Reporting by Valentina Za, editing by Louise Heavens

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