16.04 - apt-get connection failed

sudo apt-get update fails with the following error:

Err:3 http://localrepo.local/ubuntu xenial/main amd64 Packages
  Connection failed
Ign:4 http://localrepo.local/ubuntu xenial/main i386 Packages
Ign:5 http://localrepo.local/ubuntu xenial/main all Packages
Ign:6 http://localrepo.local/ubuntu xenial/main Translation-en_GB
Ign:7 http://localrepo.local/ubuntu xenial/main Translation-en
Ign:8 http://localrepo.local/ubuntu xenial/restricted amd64 Packages
Ign:9 http://localrepo.local/ubuntu xenial/restricted i386 Packages
Ign:10 http://localrepo.local/ubuntu xenial/restricted all Packages
Ign:11 http://localrepo.local/ubuntu xenial/restricted Translation-en_GB
Ign:12 http://localrepo.local/ubuntu xenial/restricted Translation-en
Reading package lists... Done
W: The repository 'http://localrepo.local/ubuntu xenial Release' does not have a Release file.
N: Data from such a repository can't be authenticated and is therefore potentially dangerous to use.
N: See apt-secure(8) manpage for repository creation and user configuration details.
E: Failed to fetch http://localrepo.local/ubuntu/dists/xenial/main/binary-amd64/Packages  Connection failed
E: Some index files failed to download. They have been ignored, or old ones used instead.

So it seems that apt-get cannot download the file but it can be downloaded by wget:

$ wget http://localrepo.local/ubuntu/dists/xenial/main/binary-amd64/Packages
--2017-10-04 09:31:18--  http://localrepo.local/ubuntu/dists/xenial/main/binary-amd64/Packages
Resolving localrepo.local(localrepo.local)... 10.38.101.107
Connecting to localrepo.local (localrepo.local)|10.38.101.107|:80... connected.
HTTP request sent, awaiting response... 200 OK
Length: 7228243 (6.9M)
Saving to: ‘Packages’
Packages                                                100%[===============================================================================================================================>]   6.89M  1.28MB/s    in 5.6s
2017-10-04 09:31:29 (1.23 MB/s) - ‘Packages’ saved [7228243/7228243]

Any idea what the problem could be?

EDIT:
Mentioned question and answer is about a specific repo that is not available and the asker is receiving 404 error. In my case the repo is available and there is no 404 error.

Also the following are not errors, they are warnings and notices:

W: The repository 'http://localrepo.local/ubuntu xenial Release' does not have a Release file.
N: Data from such a repository can't be authenticated and is therefore potentially dangerous to use.
N: See apt-secure(8) manpage for repository creation and user configuration details.

The error:

Err:3 http://localrepo.local/ubuntu xenial/main amd64 Packages
  Connection failed

and:

E: Failed to fetch http://localrepo.local/ubuntu/dists/xenial/main/binary-amd64/Packages  Connection failed
E: Some index files failed to download. They have been ignored, or old ones used instead.