Italy's Snam Eyes Italgas Spinoff
Italy’s national gas transport grid, Snam, is eyeing a possible sale of its Italgas subsidiary, which operates gas distribution in several major Italian cities.
Snam made the disclosure at its annual results on March 17: net profit last year was €1.24bn, up +3%, while adjusted net profit was €1.2bn, up 12%.
London-based investment banking firm Jefferies, quoted by Reuters, said it valued Italgas at around €7.3bn, while Italian bank Akros was quoted by local media as saying that Italian fund manager F2i might be a buyer.
Snam said it had launched “a feasibility study... to separate Italgas from Snam, which could be carried out through the partial and proportional demerger of Snam relating to its ownership in Italgas, in whole or in part.”
The completed Italgas feasibility study would be disclosed to the market by July 2016, Snam added. It also deferred its 2016-19 Strategy Plan presentation, due later this month, until July.
The company is thought to be keen to raise capital for international expansion. Three months ago it bought a 20% stake in the Trans-Adriatic Pipeline (TAP) project for €208mn. The 879-km pipe from the Turkish-Greek border to southeast Italy will carry Azeri gas flows into the EU market and is due to start up in 2020.
Gas injected into Snam’s transportation network was up 8% (or 5bn m3) year-on-year at 67.25bn m3, reflecting a year of Italian gas demand growth after several years of decline. This contrasted with Dutch counterpart Gasunie’s 4.4% decline in gas throughputs, announced earlier on March 17. Snam’s LNG import terminal at Panigaglia however handled a mere 0.03bn m3 in 2015, up from 0.02bn m3 in 2014.
"The 2015 results confirm our sound growth strategy, which is dedicated to building a network that is increasingly efficient, interconnected and capable of generating further benefits for Italy,” said CEO Carlo Malacarne.
CDP Reti is Snam’s biggest shareholder with 28.98% equity (as at end-2015). In turn CDP Reti is 59.1% owned by Italian state-controlled bank Cassa Depositi e Prestiti (CDP), 35% by the European arm of China’s State Grid Corporation and 5.9% by Italian institutional investors. CDP Reti also has a 29.85% stake in Italy's national electricity grid operator Terna.
Mark Smedley