Italy Invites Banks to Handle Enel Sale

The Italian government has written to investment banks and advisory firms inviting bids to work on the sale of a stake in state-controlled power group Enel in the next few months, a source close to the situation said on Tuesday.

The government, which holds a 31 percent stake in Enel, has said it intends to sell a 5 percent stake in the group, Italy's largest electricity supplier, as well as a similar stake in oil major Eni as part of a privatisation programme aimed at cutting its 2-trillion-euro public debt.

The source said letters had been sent out, inviting expressions of interest on the Enel operation, setting a date of December 2015 as the final date for a mandate.

However there was no word on when the operation might actually take place. Asked whether the sale would be completed by the end of the year, as previously expected, the source said: "in the next few months."

The sale of the stakes in Enel and Eni was originally expected to be completed by the end of the year but Prime Minister Matteo Renzi said earlier this month that the operation was not a priority.

The privatisation drive was intended to raise the equivalent of 0.7 percent of Italy's 1.5 trillion euro GDP, or about 11 billion euros, but market uncertainty has forced the Treasury to delay parts of the programme including the planned sale of a stake in state-owned post office operator Poste Italiane.

The Eni stake sale could raise almost 3 billion euros at current market prices, with some 2 billion coming from the Enel stake.

Separately, another 3 billion euros from the repayment of so-called "Monti bonds", the state loans issued to bail out the troubled Monte dei Paschi di Siena bank, should bring the total raised to pay down debt to some 9 billion euros.

Further contributions of about 800 million euros could come from a transfer of a stake in chipmaker STMicroelectronics to the state investment fund.

Reporting by Giselda Vagnoni