Italy's FSI and Kuwait's KIA create investment firm with $2.98 bln in assets

MILAN, July 1 Tue Jul 1, 2014 5:18pm EDT

MILAN, July 1 (Reuters) - Italian state-backed private equity fund Fondo Strategico Italiano (FSI) and Kuwait Investment Authority (KIA) have created an investment company with assets and commitments worth 2.185 billion euros ($2.98 billion), FSI said on Tuesday.

The new company, FSI Investimenti, will be 77 percent owned by FSI and 23 percent owned by KIA, it added.

"The agreement is consistent with FSI strategy of increasing its capital to 7 billion euros, also by attracting foreign investments in Italy," FSI said in the statement.

Both FSI and KIA have committed to inject up to 500 million euros into the new company, with KIA expected to pay in 352 million euros in the next few days. The capital of FSI Investimenti could be increased in future via commitments of new co-investors, FSI added.

FSI will transfer to FSI Investimenti its interests in fibre network provider Metroweb Italia, biopharmaceutical company Kedrion Group, equipment maker Valvitalia, SIA, IQ Made in Italy Investment Company and a 44.55 percent stake in power engineering company Ansaldo Energia, with the transferred portfolio valued at 1.185 billion euros.

The contributed portfolio will exclude FSI's interest in insurer Generali, earmarked for divestment by the end of next year, and a 40 percent stake in Ansaldo Energia already committed for sale to Shanghai Electric Group.

FSI Investimenti will have the same investment perimeters as FSI, excluding the gaming and alcohol sectors, in which KIA cannot invest. ($1 = 0.7331 Euros) (Reporting by Agnieszka Flak; Editing by Grant McCool)