UPDATE 1-Finmeccanica keen to stem losses at train-maker AnsaldoBreda
* To miss core earnings target on AnsaldoBreda unit
* Expects more asset disposals in coming months
* Open to all options to solve AnsaldoBreda problem
MILAN/ROME, Nov 8 (Reuters) - Italian defense group Finmeccanica would prefer to use a tender process for a possible sale of its Ansaldo STS rail technology business, part of plans to stem losses from the group's train division.
The state-controlled group is trying to combine profitable Ansaldo STS with loss-making train-maker AnsaldoBreda to create a single transport business which could attract buyers, Chief Executive Alessandro Pansa said during an analysts call on Friday, adding that all options were on the table.
Pansa said the company would find a solution for AnsaldoBreda and Ansaldo STS jointly or separately and said he would prefer to sell Ansaldo STS through a tender process rather than entering into talks with just one suitor.
Finmeccanica, in which the state owns a 30 percent stake, put its rail and other non-core assets up for sale nearly two years ago to cut debts and focus on aerospace and defence.
Last month, trade unions said Italy was in talks to bring in General Electric or another foreign company as a majority investor in AnsaldoBreda and Ansaldo STS.
But the company, Italy's second-biggest employer, has struggled to carry out its disposal plans due to political opposition to foreign takeovers. Delays to asset sales have prompted credit ratings agencies to downgrade the company to junk.
Finmeccanica said on Thursday it would miss its core earnings target for the year because of ongoing problems at its AnsaldoBreda unit.
The CEO said: "We believe it is necessary to act firmly and promptly to minimize the absorption of cash by AnsaldoBreda from the group."
As part of a strategy to tackle problems at its transport business, Pansa said AnsaldoBreda would deliver on existing contracts while making sure new orders would generate profits.
The company said it would book a capital gain from the recent sale of its power engineering unit Ansaldo Energia and seek to sell other assets to focus on its aerospace and defence business.
"In the next few months we expect to complete some other asset sales ... give us a little bit of credit," the CEO said.
At 1405 GMT shares in Finmeccanica were down 6 percent at 5.10 euros after a plunge to 4.95 euros in the early trading.
Finmeccanica, which reported a net loss of 73 million euros in the third-quarter, said it expects to post a full-year profit thanks to proceeds from its Ansaldo Energia disposal.