28 Feb 2002 – Spain’s largest utility Endesa said yesterday that it was cutting its budget for future investment from €20bn ($17.3bn) to €13bn ($11.2bn) and would be selling off non-care assets in order to raise €5bn. The company plans to consolidate its balance sheet and has effectively ruled out any new acquisition in Europe and Latin America within the next three years.

Endesa has faced declining margins in its electricity business and instability affecting its Latin American investments.

Rafael Miranda, chief executive, said that over the next five years, Endesa would focus on developing its core energy business and lowering its debt, which reached €25bn last year. The group will seek to build on its holdings in SNET, a French electricity company in which it holds a 30 per cent stake and Italian generator Elettrogen, in which it acquired a 45 per cent stake from Enel.

Miranda said that Endesa had not so far been successful in negotiating with the Dutch government in order to take a controlling position within companies in the electricity or gas markets. He indicated that investments in Dutch companies Remu and NRE were likely to be sold.