Eni and Snam Arrange €12 Billion Loan for Separation

Eni and Snam are arranging a €12 billion loan through four banks to deal with the separation of the two companies, Bloomberg and Reuters have reported.

The large loan, which will facilitate the repayment of debts owed to Eni by pipeline operator Snam, would allow Eni to reduce some of its major debts. The loan would allow debt to be repaid to Eni should Snam not sold to another buyer.

Eni holds a 53 per cent stake in Snam at a value of approximately €5.9 billion. The company is required to sell its majority stake in the pipeline operator in line with EU competition regulations and direction from the Italian government.

Last week, Minister for Energy Corrado Passera said that the separation is expected to be completed by the time of the next electon which is due for next spring.

"It's the government's intention to do it within the current legislative period but we want to be certain that we're conducting a market friendly operation that's carried out as well as possible," he said to reporters last week.

Bloomberg reports that four firms will help to faciliate the loans which will then be underwritten by a wider syndicate of lenders who have not or cannot be named as the deal is a private one. The four financial firms reported are JPMorgan Chase & Co., BNP Paribas, Intesa Sanpaolo and UniCredit.

So far Eni has declined to comment on any aspect of the reports.