Enel SpA, the Italian power company, has announced that it will sell a 49% stake in its Green Power renewable unit; this move will be done in two stages, accoring to Reuters.
Many companies are being forced into this kind of situation, as the global recession holds, the debt mounts, leaving the sale of a stake in the business as a viable option to decrease this problem. Enel will begin this transaction by selling a 25-30% tranche to institutional investors, then selling a further stake on in an initial public offering expected to reach approximately 49%. This second stage is a possibility for 2010, if better market conditions are needed.
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The company hopes that this sale, if successful, will to reduce its debt to below €50 billion, by bringing in an estimated €3.5 billion from the stake; Enel’s Green Power unit is currently estimated to be worth around €13 billion to €14 billion.