Italian oil-and-gas major, Eni, has reached an agreement to sell a minority stake in its low-carbon unit, Plenitude, to investor Energy Infrastructure Partners. The deal values Plenitude at approximately 8 billion euros ($8.75 billion) and could potentially lead to an initial public offering.
Under the terms of the agreement, Energy Infrastructure Partners will acquire a stake of up to 9% in Plenitude through a capital increase of up to EUR700 million by early 2024, becoming a minority shareholder.
This transaction will provide Plenitude with an equity value post money of up to around EUR8 billion and an enterprise value of more than EUR10 billion. The sale will also strengthen Plenitude's balance sheet, reduce corporate debt, and support the company's strategic plan, according to Eni.
Jefferies analyst Giacomo Romeo stated in a note to clients that Plenitude's valuation aligns with market expectations and establishes an important valuation floor for a potential IPO in 2024.
Plenitude emphasized that this agreement will fuel its growth in renewable energy production, the sale of energy and energy-efficiency solutions, and the development of charging infrastructure for electric mobility in Italy and Europe. The company has set ambitious targets, aiming to achieve over 7 gigawatts of installed renewable capacity by 2026 and 15 gigawatts by 2030. In addition, Plenitude expects its earnings before interest, taxes, depreciation, and amortization to triple over the 2022-2026 period, reaching EUR1.8 billion.
Eni's Chief Executive Claudio Descalzi noted that this deal will not only improve Plenitude's capital structure but also reduce the consolidated net financial leverage of Eni and optimize its capital base.
Eni had initially planned to launch an IPO for Plenitude in June 2022, but due to unfavorable market conditions, the stock market debut was postponed.
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