Italy scales back plans to sell stake in Poste

By Thomson Reuters May 30, 2024 | 9:29 AM

By Giuseppe Fonte

ROME (Reuters) – Italy will retain 51% of Poste Italiane, the Treasury told unions on Thursday, scaling back a previous plan to cut the state’s stake in the postal service to as low as 35% from 64% currently.

The move highlights the government’s difficulties in respecting its pledge to use asset sales to rein in Italy’s massive public debt.

Prime Minister Giorgia Meloni announced a decree in January to allow the Treasury to dispose all or part of its 29.3% stake in Poste while retaining control through another 35% stake held by state lender Cassa Depositi e Prestiti (CDP).

But after facing widespread criticism for selling part of a key public service, Italy now plans to review the decree to place a smaller stake in Poste, the Treasury said in a meeting with trade unions.

“We have been assured that the state will never go below 51%,” trade union Cisl representative Raffaele Roscigno told reporters.

The downscaled sale is part of Rome’s programme to raise about 0.7% of GDP from asset sales between 2025 and 2027 to curb one of the world’s highest public debts in relation to domestic output.

Italy’s debt, the second highest in the euro zone after Greece, is seen soaring towards 140% of output through 2026 before starting declining marginally the following year.

The final decree is expected to be adopted in the next three weeks, Roscigno said, adding that it would provide incentives to persuade Poste employees to buy the company’s shares and maintain a broad shareholder base.

Italy raised 3.1 billion euros ($3.35 billion) in 2015 by selling a 35% Poste stake in an initial public offering that valued the group at 8.8 billion euros. Poste is now worth 16.5 billion euros.

Treasury would then pocket just above 2 billion euros from the sale of roughly 13% of Poste.

Unions remain cautious after the Treasury announcement, with the CGIL trade union calling on the government to abandon any plans for divestment.

“Sale would be a very bad deal for the country,” said Fabrizio Solari from CGIL.

Unions argue that proceeds stemming from any sale would in any case be lower than the dividends paid by Poste over a long-term horizon.

Poste plans to pay out 6.5 billion euros in dividends between 2024 and 2028, up from the 3.8 billion euros it distributed over the previous five years.

In its drive to raise cash, Italy pocketed 3 billion euros since November 2023 via the sales of stakes in bailed out bank Monte dei Paschi (MPS) and energy group Eni.

($1 = 0.9249 euros)

(Editing by Gianluca Semeraro and David Evans)