Milan province to auction stake in SEA after IPO flop

MILAN Mon Dec 3, 2012 1:42pm EST

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MILAN (Reuters) - The cash-strapped province of Milan will make another attempt to sell its stake in airport operator SEA after an initial public offering of the company was pulled last week due to lack of demand.

Asam, a holding company owned by the province of Milan, said on Monday it would dispose of its 14.56 percent stake in SEA through an auction procedure.

The Milan province is seeking to raise cash to pay down debt by the year-end to meet public finance requirements laid down by the Italian government.

In November Asam failed to sell a 52.9 percent stake in Italy's No. 3 motorway operator Serravalle when an auction failed to attract any bids.

Asam said on Monday the base price of the SEA auction would be 160 million euros ($209.14 million), or 4.4 euros per share, above the 3.2-4.3 euros price range set in the failed IPO.

Market sources said offers had been placed for only 30 to 40 percent of the SEA shares offered in the IPO.

"It is a risky choice for the province," said Vincenzo Longo, strategist at Milan online trading firm IG Markets, adding that much depended on the auction procedure.

Asam said the auction price for its SEA stake could be lowered if there were no bids at or above the floor price. ($1 = 0.7650 euros)

(Reporting by Francesca Landini; Editing by Stephen Jewkes and Helen Massy-Beresford)

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