Finmeccanica SpA (FNC) board members are meeting today to discuss the sale of most of the Italian aerospace and defense company’s stake in power-plant division Ansaldo Energia SpA, three people familiar with the matter said.
State lender Cassa Depositi & Prestiti SpA has offered to buy 85 percent of the Genoa-based unit for as much as 1.2 billion euros ($1.6 billion), said the people, who asked not to be named because talks aren’t public. CDP would buy a 40 percent holding from Finmeccanica, leaving it with 15 percent, while private-equity firm First Reserve exits a 45 percent stake.
Finmeccanica, controlled by the Italian Treasury with a near 30 percent holding, has been trying for more than a year to raise at least 1 billion euros via asset sales to pare almost 5 billion euros in debt. A management reshuffle, inconclusive Italian elections in February and opposition from unions and lawmakers have delayed the process.
Italy’s No. 1 aerospace company, which has seen its credit rating downgraded in the absence of disposals, said Aug. 1 that net debt should fall to 3.3 billion euros by the end of the year, even without asset sales.
U.S.-based First Reserve took a stake in the energy unit in 2011 in a deal that valued the business at 1.23 billion euros.
Finmeccanica’s board will approve the deal, which includes a condition for it to keep the 15 percent stake until 2017, a union official said after a meeting between Chief Executive Officer Alessandro Pansa and labor groups. He declined to be named, citing union policy.
Finmeccanica closed 0.6 percent higher in Milan, giving a market value of 3 billion euros. The stock, which has risen for four days, has advanced 20 percent this year.
The Italian government has been studying a plan to tap Cassa Depositi’s 4 billion-euro Fondo Strategico Italiano SpA to invest in Finmeccanica units and address union concern about job security, Finance Deputy Minister Stefano Fassina said Sept. 30 in an interview.
A press officer for Cassa Depositi declined to comment on the offer. Finmeccanica said in a statement that a board meeting was planned for 4 p.m. local time, adding that no decision has been taken on Ansaldo Energia.
South Korean manufacturer Doosan Heavy Industries & Construction Co. (034020), which had been in advanced talks for Ansaldo Energia, will not be involved in the initial transaction, the people said. The government may sell a stake in a second transaction to an international partner, they said.
Finmeccanica, which will receive 260 million euros for its stake in aircraft engine maker Avio following a sale of the business to General Electric Co. (GE:US) by private equity firm Cinven Ltd., could pare assets further.
The defense company is also seeking to sell stakes in unprofitable wholly owned trainmaking unit AnsaldoBreda and possibly in its listed rail-signaling unit Ansaldo STS SpA (STS), which Finmeccanica controls with a 40 percent stake.
The Ansaldo deal “is expected to grant Finmeccanica a cash-in” of around 550 million euros, Gabriele Gambarova, an analyst at Banca Akros, said in a note yesterday, lifting the recommendation on the stock to a buy from add. The sale of Ansaldo and the Avio stake would “greatly reduce the risk of a capital increase, a scenario played by several hedge funds.”
Cassa Depositi may also announce it’s looking at buying part of trainmaking unit AnsaldoBreda, one person said.
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