Eni in talks sell Versalis

Eni in talks to sell Versalis

11:39 AM, 19th December 2015
Eni in talks to sell Versalis

SAN DONATO MILANESE, ITALY: Eni SpA said that it is in talks to sell majority stake in its Versalis chemicals business part of the company’s plans to slim down and focus on oil and gas exploration.

Eni board meeting was expected to give the go ahead to exclusive talks with US investment firm SK Capital, Two trade union leaders said.

Eni CEO Claudio Descalzi, talking to reporters on the sidelines of a meeting, said talks were under way with a bidder for Versalis but also said they could be extended to other possible buyers.

"We have in the past spoken to more than one party, at the moment we're speaking to one," Descalzi said nothing had been decided yet.

The state-controlled energy group has pledged to sell €8 billion ($8.7 billion) of assets over the next four years to help fund growth and support shareholder returns.

"We need to find funds to help develop the business," Descalzi said.

SK Capital, which focuses on investments in speciality materials, chemicals and healthcare sectors, could not be reached for comment.

Eni said it was looking for a partner to help it run Versalis, which one Milan analyst said had an enterprise value of around €1.5 billion.

Descalzi said a series of guarantees and pre-conditions put in place made a sale more difficult. These included keeping Versalis whole for five years, not cutting the workforce for three, and keeping the company in Italy.

Eni has spent time and money turning around Versalis by refocusing the business on speciality and green products and promoting its international development.

Since 2000, the division has consumed € 5.8 billion in cash, recorded net operating losses of more than €3 billion and staff numbers have dropped to 4,000 from 14,000, Eni said.

© Reuters News

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