Eni initiates sale for 10% Saipem stake

Italian energy giant Eni announced on Tuesday an accelerated bookbuilding process to divest 10% of its share capital in the oilfield services company Saipem.

This decision aligns with Eni’s broader objective to streamline its portfolio and strengthen its financial position by reducing debt and focusing on its core operations.

As of now, Eni holds a substantial 31.19% stake in Saipem. Earlier in mid-March, Eni outlined an ambitious plan to generate €8 billion ($8.59 billion) in net proceeds by 2027.

This capital will be raised through asset sales, aiming to manage the company’s debt levels more effectively. The move to sell part of its stake in Saipem is a key component of this strategy.

Details of the share placement

The placement of shares will be directed towards institutional investors and will be managed by a consortium of leading financial institutions including Citigroup, Goldman Sachs International, Intesa Sanpaolo, Natixis, and UniCredit. This high-profile group of banks underscores the significance and scale of the transaction.

Notably, the shares included in this sale are not part of the existing shareholders' agreement between Eni and the Italian state lender CDP through its unit CDP Equity. This agreement remains intact, ensuring stability in the shareholder structure post-sale.

To provide further market stability, Eni has committed to a lock-up period of 180 days during which it will not sell any additional shares of Saipem on the market. This commitment is aimed at maintaining investor confidence and supporting Saipem’s share price during the transition.

Financial implications and market reactions

The announcement of the stake sale comes shortly after S&P Global Ratings downgraded Eni's outlook to 'negative'. This downgrade reflects concerns about the company’s projected higher leverage over the next two years. The rating agency's action underscores the financial challenges Eni faces and highlights the necessity of the current asset divestment strategy.

Despite these challenges, Saipem has shown resilience. Following a profit warning in 2022, the company undertook a successful capital raise, restructured its operations, and revamped its executive team. These measures have stabilised the company and positioned it for future growth.