Italy cuts Eni stake, raises 1.4 billion euros

By Thomson Reuters May 15, 2024 | 4:35 PM

By Giuseppe Fonte and Francesca Landini

ROME (Reuters) -Italy’s Treasury on Wednesday sold a 2.8% stake in energy group Eni, pocketing around 1.4 billion euros ($1.52 billion) in its drive to raise cash to bolster the country’s creaking public finances.

Rome carried out the transaction through an accelerated bookbuilding procedure (ABB) and placed the shares at 14.855 euros each, offering a 1.7% discount to Wednesday’s closing price, the Treasury said in a statement.

The discount applied is very limited compared with other similar deals, according to a source familiar with the matter.

When settled, the transaction will reduce the Treasury’s stake to 2% from 4.8%.

The government will however maintain a firm grip on Eni with its overall stake still above 30%, as state lender Cassa Depositi e Prestiti (CDP) holds another 28.5% stake in the energy group.

Goldman Sachs International, Jefferies and UBS Europe SE acted as joint global coordinators for the placement.

As part of the deal, Rome committed not to sell more Eni shares on the market for 90 days without the consent of the global coordinators, the Treasury said.

Economy Minister Giancarlo Giorgetti raised the prospect of the share sale in November, confirming a previous Reuters report.

Italy’s public debt, the second largest in the euro zone as a proportion of output and under close scrutiny from rating agencies, is forecast to rise to 139.8% of GDP in 2026 from 137.3% in 2023 before declining marginally to 139.6% in 2027, according to the latest Treasury estimates unveiled in April.

The projections factor in revenues from asset sales with a cumulative value close to 1% of GDP through 2027.

Disposals have taken on fresh prominence in Italy as the period of expansionary fiscal policy triggered by the pandemic is set to end next year, when the European Union will adopt stricter budget rules under the reform of its Stability and Growth Pact.

Rome has already sold 37.5% of bailed-out lender Monte dei Paschi di Siena, collecting around 1.6 billion euros. The Treasury also intends to sell all or part of its 29.3% direct stake in postal service Poste Italiane, while retaining control through another 35% held by CDP.

($1 = 0.9189 euros)

(Editing by Gavin Jones, Rod Nickel, Kirsten Donovan and Cynthia Osterman)