Italy could ease debt by Eni sale-activist fund

MILAN, July 19 (BestGrowthStock) – Italy could reduce its high
public debt by splitting state-controlled energy group Eni SpA
(ENI.MI: ) into two parts and selling upstream activities, an
activist fund shareholder said on Monday. [ID:nTST002382]

In a letter to the Financial Times, Eric Knight, chief
executive of New York-based fund Knight Vinke Asset Management
— a 1 percent Eni shareholder — reiterated his call for a
separation of Eni’s upstream and downstream activities.

“The separation of these two businesses provides the Italian
taxpayer with a tremendous value opportunity. (Knight Vinke …
estimates the whole group is undervalued by up to 60 billion
euro as a result of this structure),” Knight said in the letter.

“The value that could be released by the state being able to
sell part or all of its holding in the upstream business would
go a very long way to reducing concerns about Italy becoming
‘the next Greece or Hungary’,” he said.

Eni declined to comment.

Knight Vinke first proposed the split in September 2009 when
it said the company’s cut in its dividend was a sign it was
financially constrained. [ID:nL2729227]

In his letter, Knight said it was understandable that Italy
would wish to keep an important stake in the downstream utility
business but the value of its upstream oil and gas business is
constrained by this conglomerate structure.

In the past Eni has said a break-up would destroy value
since upstream/downstream integration has strategic and
commercial benefits.
(Writing by Nigel Tutt; Editing by Sharon Lindores)

Italy could ease debt by Eni sale-activist fund