Enel launches IPO and pushes wind

ITALY: Italian utility Enel held an initial public offering of renewable arm Enel Green Power (EGP) in October, as part of its aim to cut debt and protect its credit ratings.

The sale of up to 32.5% of EGP could bring in as much as EUR3.4 billion for the utility, in what is expected to be largest IPO in Europe since Spanish wind giant Iberdrola Renovables went public in December 2007.

Enel shares will be offered to both retail and institutional investors at a targeted price of EUR1.8-EUR2.1 per share, valuing EGP at between EUR9 and EUR10.5 billion.

This is down from a pre-marketing valuation of as much as EUR12 billion. The offer ran to the end of October, with the final price to be announced at its conclusion. EGP shares should begin trading on the Milan and Madrid stock exchanges this month.

The Italian utility believes one of EGP's selling points is that it is more diversified than competitors like Iberdrola Renovables, France's EDF Energies Nouvelles, or Portugual's EDP Renovaveis, all of which have seen share prices fall since listing.

Enel argues that its diversification, both in terms of geography and its power generation mix, reduces the regulatory and technological risks inherent in concentrating strongly on one area or sector.

Enel says 41% of EGP's installed capacity of 5.8GW as of June 30 came from wind, 44% hydroelectric power, 13% geothermal and 2% other sources. It has indicated that wind will be its most important generation source in coming years.

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