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Italy To Sell 40% of Fincantieri Holdings

Nov. 22, 2013 - 03:37PM   |  
By TOM KINGTON   |   Comments
The Italian government plans to sell a portion of its stake in shipbuilder Fincantieri.
The Italian government plans to sell a portion of its stake in shipbuilder Fincantieri. (Fincantieri)
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ROME — The Italian government is planning to sell a 40 percent stake in shipbuilder Fincantieri, part of a drive to raise up to €12 billion (US $16.1 billion) to help cut public debt.

The stake in Fincantieri will be put on the block alongside stakes held by the Italian state in computer chip maker STMicroelectronics, air traffic controller ENAV and energy firm Eni.

Making the announcement on Nov. 20, Italian Prime Minister Enrico Letta said the sell-off would reduce Italy’s 2014 budget deficit and lower Italy’s soaring debt pile.

Fincantieri, which is currently 99 percent owned by the Italian state, saw a €15 million profit last year on €2.39 billion in revenue.

Apart from building warships and cruise vessels at Italian yards, the firm spent $120 million in 2008 to take over Manitowoc Marine Group (MMG), and through it the Marinette Marine yard which builds littoral combat ships for Lockheed Martin.

In a €455 million deal signed in December 2012, Fincantieri took over 10 shipyards building offshore vessels for oil rigs from Korean shipbuilder STX.

Italian press reports this week suggested another defense-related deal might be in the works in Italy with France’s Safran reportedly pushing to become a partner with Finmeccanica in Avio Space, the space activity of propulsion firm Avio.

Avio’s main propulsion activity was sold to GE this year, but its owners, UK fund Cinven and Finmeccanica, held on to their respective 86 and 14 percent stakes in Avio Space.

With Cinven due to sell IT share, Finmeccanica CEO Alessandro Pansa told analysts on Nov. 8 that Finmeccanica intended to hold on to its stake and possibly increase it.

“We still maintain an interest in Avio [Space],” he said. “Finmeccanica maintains a strong interest in buying assets and maintaining our strong interest in space,” he added.

“We are in the middle of discussions with the seller and other international companies interested in being our partner,” he said, “but it has to be strategically viable and financially acceptable.”

Both Safran and EADS have made non-binding offers worth around €300 million for Avio Space, but have also said they would be prepared to be minority partners with Finmeccanica.

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