Italian giant Eni has sold 12.5% interest in its subsidiary Saipem, to Fondo Strategico Italiano (FSI) in a move that is expected to enhance Eni’s financial flexibility and development.
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Image from Saipem. |
Both Eni and FSI will contribute to the shareholders’ agreement, for its entire duration, an equal number of Saipem shares, which will not exceed 12.5% plus one share of the company’s ordinary share capital (therefore up to a total amount slightly above 25% of Saipem ordinary share capital).
The agreement will enter into force on the closing date of the sale and purchase agreement, for a period of three years, with automatic renewal for a further period of three years, unless terminated by notice.
Following the loss of exclusive control over Saipem, the remaining stake held by Eni in the company will be deconsolidated from the date on which the sale of the transferred stake will be executed and will be registered in Eni’s financial statements according to the equity method.
Subject to the performance of the sale and purchase agreement, Eni expects to collect approximately US$7.2 billion (6.5 billion EUR) in total, such amount resulting from the full repayment of net credits. Considering the assumed disbursement for the subscription pro-rata of the capital increase, it is estimated that the net proceeds for Eni will be nearly $6 billion (5.4 billion EUR), while the reduction of net debt will be approximately $5.6 billion (5.1 billion EUR).
The agreement will be terminated in the event that the capital increase is not settled by 31 May 2016 and if the outstanding debt of Saipem Group to the Eni Group is not repaid in full by 30 June 2016.
"The transaction announced today marks a significant step in Eni’s transformation strategy. It enables us to focus on our core activities and to enhance our financial flexibility. The additional financial resources will be used to develop the very significant oil and gas reserves we have discovered over the past few years and to strengthen our balance sheet in line with our targets,” Eni’s CEO, Claudio Descalzi, said.
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