Enel’s board was meeting yesterday to work out a strategy to reduce the power utility’s debts of more than €60bn ($76.5bn) through a possible €8bn rights issue, sources close to the matter said. The Italian government, which owns about a third of Enel, would be expected to support the capital increase. Libya is also examining the situation in line with its policy of seeking more opportunities in Italy, a Libyan official told the Financial Times.
The Enel board may release a statement after markets close or early on Thursday before they reopen.
Enel’s need to take action to preserve its A credit rating became urgent after it agreed on February 21 to pay €11.1bn for a 25 per cent stake in Spain’s Endesa from Acciona, taking its shareholding to 92 per cent.
This week, analysts suggested that Enel would make a rights issue of €5bn-€7bn, but the final figure could be as much as €8bn, the sources said.
Analysts expect a 2009 dividend cut of at least 20 per cent. An announcement on major disposals is not expected.
Enel’s shares were trading down 1.5 per cent as the board started its meeting, having lost more than 20 per cent this year.
Libya, whose sovereign wealth funds have shown interest in Italian assets, is examining the value of buying Enel shares on the market, Hafed Gaddur, Libya’s ambassador to Rome, said in an interview.
“We will look at it [the rights issue]. It could be interesting,” he said.
The ambassador stressed that Libya had taken a prudent approach towards its foreign investments, noting that other sovereign wealth funds had dived into markets too early.
Libya has lost money on its investments in Unicredit, a leading Italian bank, of which the country could emerge as the largest single shareholder.
Mr Gaddur said that Libya was a long-term investor and would acquire assets gradually.
The ambassador, recalling Libya’s announcement in December that it intended to buy up to 10 per cent of Eni, the Italian energy group, said its stakebuilding could take months or more than a year.
“The right time to buy, according to the price, will be chosen,” he said of Eni, which has its largest operations in Libya.
“Then the buying operation will begin gradually.”
Libya’s ties with Italy entered a new phase last year when Silvio Berlusconi, Italy’s prime minister, agreed a deal to pay compensation for the colonial era.
Mr Berlusconi went to Libya this month to reiterate Italy’s plans. In return, Libya is expected to offer infrastructure projects to Italian companies.