Italian Prime Minister Enrico Letta plans to sell 3 percent of Eni SpA as part of a program to raise as much as 12 billion euros ($16 billion) by disposing of state assets to reduce Europe’s second-biggest public debt.
Italy’s 30 percent stake in the oil company, which is split between the Treasury and state lender Cassa Depositi e Prestiti, won’t fall below that level because of an Eni buyback that will reduce the shares outstanding, Letta said at a press conference in Rome after a cabinet meeting. Italy also plans to sell stakes in STMicroelectronics NV, Grandi Stazioni SpA, Fincantieri Cantieri Navali Italiani SpA and Sace SpA.
Letta, 47, is divesting assets to comply with European Union debt-reduction targets. Italy’s 2.1 trillion-euro debt is second to Germany and, at 133 percent of gross domestic product, behind only Greece in Europe.
“It’s a choice we’re making to free up other resources,” Letta said. Italy expects to get “greater flexibility for productive investment” from the EU thanks to the asset sales and other budget moves, he said.
Eni fell 0.4 percent to 17.96 euros in Milan, while Geneva-based STMicro declined 1.3 percent to 5.81 euros. Eni has shareholders’ approval to buy back as much as 10 percent of its own capital.
Italy’s stake in Eni won’t be sold until the oil company completes its stock repurchase plan and then cancels the shares, the Finance Ministry said in an e-mailed statement. The buyback would leave Italy with about 33 percent of Eni, allowing the government to then sell 3 percent without dropping below 30 percent, the ministry said.
The 3 percent Eni stake is valued at about 2 billion euros at current market prices, which give the full company a value of about 65 billion euros. Italy’s STMicro investment is indirect, owned through a 50 percent holding of STMicroelectronics Holding, the company’s biggest shareholder with a 28 percent stake, according to data compiled by Bloomberg.
About half of the proceeds of the disposals, which Letta estimated at a minimum of 10 billion euros, will go toward public debt reduction next year, the premier said. The other half will remain with CDP, he said. The sales should be completed by the end of 2014.
The government will consider further asset sales in coming months, Letta said.