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Italian concession caterers call for rent relief, investment freeze

Published 07/04/2020, 17:55
Updated 07/04/2020, 18:00
© Reuters.

© Reuters.

By Francesca Landini

MILAN (Reuters) - Italian caterers are asking for rent cuts, relief from investment obligations and the extension of concession contracts to cope with the health emergency, their lobby group whose members include Autogrill (MI:AGL) and the Italian unit of Mcdonald's (N:MCD) said on Tuesday.

The groups running outlets on motorways, in airports and a railway stations said the government decision to limit people's movements had dented sales at a time when they were asked to remain open for people travelling for essential reasons.

"Our sales have fallen to near zero and so has cash flow generation," said lobby group AIGRIM, which also represents French group Lagardere (PA:LAGA), Chef Express (MI:MARR) and the Italian units of fast food chains Burger King and Kentucky Fried Chicken.

AIGRIM, whose members employ around 30,000 people in Italy, asked for the government's intervention to convince motorway, airport and railway station operators in the country to cancel rents while the country is under lockdown.

Once the restrictions are over, rents should be capped and linked to sales, payments should be delayed and investments blocked until sales recover to pre-emergency levels, the 11 groups represented by AIGRIM said in a statement.

The lobby also asked for catering concessions to be extended for 12 months and for access to liquidity and bank loans under a new government guarantee scheme.

A source close to Autogrill told Reuters last month that the group was in talks with airports, motorway operators and other landlords around the world to cut rents to cope with a fall in sales triggered by the health emergency.

According to Autogrill's latest balance sheet, the group paid 983 million euros ($1.1 billion) last year in leases, rent, concessions and royalties. Fixed costs for rents are around 400 million euros, financial analysts have calculated.

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