Enel to press ahead with renewables IPO

MOSCOW (Reuters) - Italy's biggest utility Enel plans to list a stake in its renewables unit despite difficult market conditions and a potential change to Italy's renewable incentives scheme, Chief Executive Fulvio Conti said.

Enel, with debts of 51.9 billion euros at the end of March, aims in October to raise between 3 billion and 4 billion euros ($5.37 billion) from the sale of a minority stake in Enel Green Power (EGP), in what would be Europe's largest initial public offering (IPO) so far this year.

"EGP can be floated in turbulent markets such as these. It is yielding money, it is not a pie in the sky company ... We believe October is the right moment," Conti told reporters at a news conference in Moscow on Tuesday.

By 1133 GMT Enel shares were up 2.99 percent at 3.535 euros while the STOXX Europe 600 Utilities index was up 1.87 percent.

The global market for IPOs, which had shown signs of a resurgence early in the year, faces a spate of delays and downsizings.

In June Italy's Intesa Sanpaolo delayed plans to list its Banca Fideuram unit amid market doubts about the falling euro and sovereign debt.

Asked whether government legislation on reform of renewable incentives could impact the EGP IPO Conti said "I do not see any risk," adding he believed the government would change the proposals.

"As technology improves we would expect a reduction in the premiums given to the industry ... (but) we do not see any special worry (for the IPO)," he said.

Draft legislation before Italy's parliament could, if passed, prompt a fall in the price of green certificates -- tradable securities awarded to all renewable energy producers except solar.

DISPOSALS ON TRACK

A series of other disposals tabled by Enel, Europe's most indebted utility, are on track for completion this year as the group moves to reduce its debt to 45 billion euros by year end and hang on to its credit rating.

The sale of Enel's Spanish unit Endesa's gas distribution network in Spain will be closed in September, while the sale of Bulgarian power generation assets are expected to be completed in the summer, Conti said.

The CEO also said Enel is on track to beat its forecast for an earnings before interest, tax, depreciation and amortization (EBITDA) of 16 billion euros in 2010.

"The market consensus is above 16 billion (euros) anyway so that's no surprise," a Milan-based analyst said.

In a presentation on its Russian business on Tuesday Enel said it sees earnings at its Russian unit OGK-5 growing five-fold by 2014 amid favorable market conditions.

(Reporting by John Bowker and Ben Judah; Additional reporting/writing by Stephen Jewkes in Milan; Editing by Sharon Lindores)

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