UPDATE 3-Italy officials meet to plan sale of post office stake
* Part of planned government asset sales to cut debt
* Up to 40 percent stake sale targeted
* Aim is to sell stake by end-year
ROME, Jan 9 (Reuters) - Italian government officials met on Thursday to set out plans to sell a non-controlling stake in post office group Poste Italiane as part of efforts to reduce the country's massive debt, two government sources said.
Prime Minister Enrico Letta's economic adviser Fabrizio Pagani, Deputy Industry Minister Antonio Catricala and Poste Italiane Chief Executive Officer Massimo Sarmi were among those who made a preliminary agreement to sell up to 40 percent of the postal service, which is wholly owned by the government, sources said.
The aim is to sell a stake in the umbrella group rather than cherrypick shares in its individual banking or insurance units, the sources said. They ruled out a full sale of the group.
"Selling a majority stake is not an option," one of the sources said.
Letta's office issued a statement saying the meeting looked at ways "to get maximum value out of the company, also with a view to its privatisation." It gave no details on plans for the sale.
Shares will be offered to institutional and retail investors including employees, who may also be able to send representatives to the company's board, sources said.
The government hopes to conclude the sale before the end of this year to enable proceeds to be used to cut debt from 2014.
Poste Italiano declined to comment.
The sale of a stake in Poste Italiane would follow the British government's sale of a 60 percent stake in Royal Mail in October in an operation that valued the group at 3.3 billion pounds ($5.43 billion).
One source said investor interest in a stake in the Italian post office was expected to be strong, but the government will also be wary of repeating the British experience, where unions and opposition politicians accused the government of selling the Royal Mail stake too cheaply.
Italy, with a public debt expected to stand at 132.8 percent of gross domestic product in 2014, a level surpassed only by Greece in the European Union, is counting on privatisation revenues to rein it in.
In November, Letta announced plans to raise as much as 12 billion euros through the sale of stakes in public entities including oil and gas group Eni, air traffic controller Enav and shipbuilder Fincantieri.
Italy has promised for years to divest some of its extensive corporate holdings but has had little to show for it. However, growing pressure from the European Commission to begin reducing a debt pile that has shot up in the recession of the past two years has added urgency to the plans.