UPDATE 1-Finmeccanica down as CEO switch seen delaying asset sales

Tue Apr 15, 2014 5:49am EDT

* Government proposes outsider Mario Moretti as new Finmeccanica CEO

* Appointment seen delaying sales of assets

* Moretti faces task of turning around scandal-hit company

* Shares down 3 pct (Adds comments, background)

By Danilo Masoni

MILAN, April 15 (Reuters) - Shares in Finmeccanica fell three percent on Tuesday as the Italian government's choice of chief executive fuelled speculation the state-controlled aerospace and defence company could delay the sale of its transportation units.

In board changes at state firms on Monday, Prime Minister Matteo Renzi's government proposed Mauro Moretti, a tough senior manager known for turning around previously loss-making state railways Ferrovie dello Stato, as CEO of scandal-hit Finmeccanica.

Renzi also put forward experienced insiders Claudio Descalzi and Francesco Starace to head energy company Eni and utility Enel and prominent female businesswomen as chairs.

Moretti could be facing the most challenging job after a series of judicial scandals that have hit Finmeccanica and prospects for consolidation in the defence industry.

After 37 years at Ferrovie, Moretti has no experience in Finmeccanica's core aerospace and defence businesses and will need time before his new team is fully operational.

"We believe that the focus on the core business remains a priority, but inevitably timing to take a decision (on asset sales) will lengthen," broker Equita said in a note.

Finmeccanica shares were down 3.06 percent at 0911 GMT while Ansaldo STS was down nearly 4 percent.

Eni was down 0.2 percent and Enel was off 1.45 percent after the government's proposed slate of new board directors.

Shareholders at the state-controlled companies will elect new boards at annual meetings scheduled in May.

Finmeccanica has put up for sale loss-making train making unit AnsaldoBreda and its stake in rail technology company Ansaldo STS more than two years ago aiming to cut debt.

Political meddling and a series of corruption scandals have delayed the process, triggering a downgrade to junk of its 3.3 billion euro debt pile.

This month, U.S. conglomerate General Electric said it was no longer in a race to buy Ansaldo STS, although the company is still being targeted by several Asian players.

Moretti's predecessor, Alessandro Pansa, said in March he was upbeat about the sale of the group's transportation units.

Selling AnsaldoBreda would eliminate a source of cash absorption while the group's 40 percent stake in profitable STS is worth around 600 million euros at current market prices. (Additional reporting by Stephen Jewkes; Editing by Lisa Jucca and Jason Neely)

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