14 Mar 2002 – The enforced break-up of the monopoly controlled by Italian energy giant Enel continues this week with three groups expected to post bids for its Eurogen generating subsidiary by tomorrow’s 5pm deadline.
Eurogen is the second tranch of the sell-off of 15 000 MW of generating capacity in order to comply with an EU directive. The first unit, Elettrogen, was sold last year to Spain’s Endesa for €2.63bn plus €1.06bn in debt.
The consortium led by Edison including participations of AEM, Atel, Unicredito Italiano, Interbanca and the Royal Bank of Scotland has approved a final offer for Elettrogen, which is regarded by industry-watchers as favourite to succeed. The consortium has recently arranged a €4bn bank bridging facility to back its bid.
Edison is owned by Fiat SpA along with Electricite de France.
Another known bidder is the Energia Italiana SpA consortium in tandem with Belgium’s Electrabel. Spanish electricity supplier Iberdrola SA is rumoured to be among the interested parties, but has declined to confirm an offer is in the pipeline.
The winner of the auction will take control of ten per cent of the country’s electricity generating capacity and will be the second largest producer behind Enel.
The Energia Italiana group has sought to widen its investor base in order to improve its bidding potential but petroleum group Erg dropped out on Monday and US energy group Mirant withdrew in December.
It is expected that Eurogen will not attract the same level of bids, as did Elettrogen. Although it has 7009 MW of capacity, it is not regarded as so efficient and recent proposals by the Italian government to speed up the construction of new generating capacity an moves to force Enel to sell-off a further 2000-2500 MW have dampened expectations.
Edison’s chairman, Umberto Quadrino, said last month he expects Eurogen to be cheaper than Elettrogen, adding it will likely be sold after just one round of bidding.