UPDATE: Banks Vie To Win Enel Green Power IPO Mandate

16th Jun 2010 12:42

(Adds details on banks involved.) By Margot Patrick and Sabrina Cohen Of DOW JONES NEWSWIRES LONDON (Dow Jones)--A host of major Italian and international banks are pitching this week to win the mandate for what is set to be Europe's largest initial public offering this year, for Enel SpA's (ENEL.MI) renewables energy business. People at some the banks said meetings are continuing Wednesday in the run-up to Enel's expected filing of an IPO prospectus Thursday, with a decision on the lucrative mandate to be made within the next week. With an expected fund-raising of at least EUR3 billion and market capitalization of EUR10 billion or more, the deal would be the largest in Europe since Spanish rival Iberdrola SA (IBE.MC) raised EUR4.1 billion from the flotation of its renewables unit, Iberdrola Renovables SA (IBR.MC) in December 2007. Mediobanca SpA (MB.MI) is financial adviser to Enel. Other banks competing for the mandate include Intesa Sanpaolo SpA (ISP.MI) unit Banca IMI, UniCredit SpA (UCG.MI), Morgan Stanley (MS), HSBC Holdings PLC (HBC), Deutsche Bank AG (DB), JP Morgan Chase & Co. (JPM) and UBS AG (UBS), people involved in the process said. Government-controlled Enel in March said it planned to list shares in the Enel Green Power business on the Milan and Madrid stock exchanges later in the year, to help it reduce its EUR52 billion debt. Enel Chief Executive Officer Fulvio Conti last week said that plan is on track for an October IPO. The IPO plan comes as dozens of other companies across the globe have put float plans on hold in recent months because of volatile markets, including other sustainable power companies such as the U.K.'s Engyco PLC and Spain's Renovalia Energy SA. Bankers said the business should prove attractive to investors because of expected growth in earnings as Enel Green Power increases capacity in its hydroelectric, geothermal, wind, solar and biomass energy generation. Enel estimates that Enel Green Power will make EUR2.1 billion in 2014 earnings before interest, tax, depreciation and amortization, as installed capacity grows to around 9.2 gigawatts, from EUR1.3 billion in 2009 on around 5.7 gigawatts. However, shares in Iberdrola Renovables, which specializes in wind power, are currently trading at less than half their EUR5.30 offer price, reflecting uncertainty about how quickly renewable energy will replace traditional forms, and the role of government subsidies on profitability. -By Margot Patrick in London and Sabrina Cohen in Milan, Dow Jones Newswires; +44 (0)20 7842 9451; [email protected] (END) Dow Jones Newswires June 16, 2010 07:42 ET (11:42 GMT)