Enel Will Meet Its 2014 Debt Reduction Target, Chief Executive Conti Says
Enel SpA Chief Executive Officer Fulvio Conti said the company will meet its target of cutting debt to 39 billion euros ($54 billion) by 2014.
“Enel will deliver what it promised to rating agencies,” Conti told reporters during a press conference in Milan, detailing the sale of shares in renewable energy unit Enel Green Power. He confirmed the initial public offering and other asset disposals will lower debt to 45 billion euros this year paving the way for the 2014 target.
Enel will raise as much as 3.4 billion euros from the Green Power sale by offering 32.5 percent to individual and institutional investors. Enel is also disposing of gas- distribution assets in Spain and a stake in a Bulgarian coal- fired plant. Conti said there are no plans to sell further stakes of Enel Green Power.
Italy’s biggest utility started selling shares of Enel Green Power today in Milan at 1.8 euros to 2.1 euros each. The offer will close on Oct. 29 and shares will start trading Nov. 4 on the Milan and Madrid stock exchanges.
“The interest for Green Power from core investors remains,” Conti said without elaborating.
Enel is attempting to lure investors with dividends that are above-average for the sector. The company will pay 30 percent of net income to investors, equal to a yield of about 2 percent based on the offer price.
The yield for retail investors can rise to “at least five or six percent” if they keep the stock for twelve months or more and gain access to bonus shares, Conti said.
Remaining net income will go toward growth with plans to invest 5.2 billion euros in the next four years to increase capacity from 5,700 megawatts to 9,200 megawatts, he said.
Bank of America Corp., Intesa Sanpaolo’s Banca IMI SpA, Barclays Plc, Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Mediobanca SpA, Morgan Stanley, UniCredit SpA and Banco Bilbao Vizcaya Argentaria SA are managing the IPO.
To contact the editor responsible for this story: Will Kennedy at email@example.com.