18 September 2002 – Italian utility Edison is to undergo a debt restructuring following the agreement of its largest shareholder Italenergia backed by Electricité de France (EdF).
Financial sources revealed on Tuesday that an agreement has been reached to provide Edison with a €1bn ($964.3m) subordinated loan to be backed by Italenergia shareholder EdF. The funding is part of a €4bn restructuring at Italy’s second-largest energy firm aimed at improving Edison’s finances and fuelling its push into Italy’s liberalising and lucrative energy market.
The loan is due to be placed by Deutsche Bank at the end of September.
EdF, Fiat, Carlo Tassara financier Romain Zaleski and three banks set up Italenergia last year to take over Edison’s former owner Montedison. They have since sold off non-core food assets to focus on energy. On Monday Edison sold its interest in shipbuilder Intermarine Spa to Rodriquez Cantieri Navali Spa for €2.7m
Italenergia also approved a deal that allows debt-heavy industrial group Fiat to raise €bn1.7 by selling part of its stake in the consortium and using the rest as collateral for a loan from Citibank.
Fiat, which had 38.6 per cent of Italenergia, will sell 14 per cent to the three banks – Capitalia, IntesaBci and Sanpaolo IMI – for €576m.
The Citibank loan will be backed by an option to sell the remaining 24.6 per cent to EdF if Fiat cannot pay the cash back.
But Fiat, whose Chairman Paolo Fresco has called its part in Italenergia “a major strategic move”, can boost its share in the company to up to 82 per cent in 2005.
Options that mature in 2005 allow the banks and Zaleski to sell out to EdF, which currently owns 18 per cent of Italenergia, but Fiat will have first call on the stakes.
Edison’s installed power in Italy exceeds 6000 MW, with 45 hydroelectric power plants, wind farms for around 200 MW, and 30 thermoelectric power plants almost all of which operate on a combined cogeneration cycle using natural gas. Following the purchase of Eurogen by Edipower, in which Edison has a 40 per cent stake, the Group can count on an overall supply of around 10 000 MW.