2nd UPDATE: Enel Gets EUR7 Billion Finance For Endesa Stake-Sources
January 19 2009 - 12:02PM
Dow Jones News
Enel SpA (ENEL.MI) has set up about EUR7 billion of financing to
enable it to take full control of Endesa SA (ELE.MC) in a deal
expected in the next few weeks and just after a year of joint
ownership, said people familiar with the matter Monday.
The agreement, in which Enel will buy Acciona SA's (ANA.MC) 25%
stake in Endesa, is estimated to take place in the "next few
weeks," said one of the people familiar with the matter. The person
asked not to be named.
The financing deal, lined up to buy Acciona's stake, would help
Enel to take control of one of Spain's largest power utilities.
Enel already spent almost EUR30 billion to buy a 67% stake in
Endesa in 2007, but it has jointly run the company with
Acciona.
As part of the 2007 agreement between the two, Acciona holds a
put option that allows it to force Enel to buy out its stake from
2010 at more than EUR41 a share, or about 39% higher than the
current value, placing a value of around EUR11 billion on the
stake.
The pool of Italian and Spanish banks that are part of the
financing are Mediobanca SpA (MB.MI), UniCredit SpA (UCG.MI),
Intesa Sanpaolo SpA (ISP.MI), Banco Santander SA (STD), Banco
Bilbao Vizcaya Argentaria SA (BBV) and La Caixa, the people
said.
The agreement is expected to happen "in the next two months" and
would allow Italy's biggest utility to run the Spanish company on
its own, said another person, who asked not to be identified.
Analysts say that spats between the two in their joint
management of Endesa indicate parting would be better.
The reason why Enel is interested in buying out Acciona is so it
can run the company more efficiently, said one of the people.
One of the people said he originally had thought the
breakthrough could happen during the Christmas holiday period but
cautioned certain conditions still had to be met.
A key part of the deal would be the valuation of Endesa's
renewable energy assets in a transaction that would include selling
them to Acciona so as to reduce the cash burden for Enel.
The person also said Enel isn't concerned about the extra debt
burden from the deal.
Enel has reported its net debt on Sept. 30 - its last public
figure - was EUR51.4 billion and that the amount for the end of
2008 would be less than EUR50 billion. Enel's market value Monday
closed at EUR27.1 billion.
In November, Enel Chief Executive Fulvio Conti repeated on a
conference call that any deal increasing the utility's debt pile
would be accepted only if it allows the company to keep its "A"
credit rating.
On Thursday, Standard & Poor's Rating Services said it
placed its "A-" long-term corporate credit rating on Enel on
"CreditWatch" with negative implications. It cited Enel's "weak"
capital structure, delays in its asset disposal program and
"significant" refinancing risk as some of its concerns.
Monday, Enel shares closed 1.6% higher at EUR4.38, outperforming
the 1.8% drop in Italy's benchmark S&PMib Index.
Company Web site: http://www.enel.it
-By Liam Moloney and Sabrina Cohen, Dow Jones Newswires; +39 06
6976 6924; liam.moloney@dowjones.com
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