Eni slashes debt as it hands over control of Snam
MILAN (Reuters) - Italy's Eni (ENI.MI) slashed its debt as it gave up control of Snam (SRG.MI) by completing the sale of just under 30 percent of the gas grid company to state-controlled Cassa Depositi e Prestiti (CDP).
The deal, announced earlier this year, will lighten Eni's debt pile by around 14.7 billion euros ($19.06 billion), Eni said in a statement as it moves to shift its focus to upstream exploration and production.
In May the Italian government introduced a decree calling on the oil and gas group to exit Snam in an effort to improve competition in the gas sector and reduce gas prices.
Italy has some of the highest energy prices in Europe which puts its companies at a competitive disadvantage.
Under the agreement, CDP will pay Eni a total of 3.517 billion euros in cash in three tranches. The deal will also allow Eni to lift around 11 billion euros of Snam debt off its balance sheet.
Eni, which used to control Snam with a stake of over 50 percent, now holds around 20 percent.
CDP, which already controls Italy's power grid operator Terna (TRN.MI), carried out the operation through its wholly-owned unit CDP Reti.
It said it intended to open up CDP Reti's equity to other investors interested in non-controlling stakes.
The government has said the power and gas grids are strategic assets.
In a statement, Snam also said its board had appointed former European Central Bank board member Lorenzo Bini Smaghi as chairman. ($1 = 0.7712 euros)
(Reporting By Stephen Jewkes; Editing by Helen Massy-Beresford)