MILAN Italy's Eni (ENI.MI) raised 1.4 billion euros ($1.81 billion) from the sale of shares and convertible bonds in Galp Energia (GALP.LS) on Tuesday as it pushes on with plans to exit the Portuguese energy company.
In a complex operation, Eni sold a 4 percent stake in Galp on the market for about 381 million euros while completing the placement of some 1.028 billion euros of senior unsecured bonds exchangeable into Galp shares.
The bonds, representing stock for about 8 percent of Galp, will be exchangeable into Galp shares at a price of around 15.5 euros, the company said.
Eni earlier this year sold a 5 percent interest to reduce its overall holding to just more than 28.34 percent and has already flagged its intention to sell its Galp stake in phases.
The state-controlled group, which has on several occasions said it does not want to remain invested in listed companies it does not control, is selling non-core assets to siphon cash into more profitable upstream oil and gas development.
On Monday, Eni said it wanted to sell a stake of about 6 percent in Galp, worth near 607 million euros at Monday's closing market price of 12.2 euros.
The final placement price was 11.48 euros per share, a discount of almost 6 percent to Monday's close.
"Galp has a small free float so getting away 4 percent, plus another 1 percent from Caixa, was a good result," a trader said.
Portugal's Caixa Geral de Depositos exercised a tag-along right it had to sell its 1 percent stake in Galsi.
Earlier this year, Eni Chief Executive Paolo Scaroni said he expected the sale of the entire 33.34 percent holding in Galp to fetch around 3.5 billion euros compared with the 900 million euros the group had originally paid.
This year Eni has sold down its stake in domestic gas transport operator Snam (SRG.MI), which cut its debt by around 14.7 billion euros.
"We estimate that following these transactions, and assuming Amorin takes up a call option on 5 percent ... and pre-emption on (a further stake), Eni will have around 8 percent of Galp left to place," Peter Hutton, an analyst at RBC Capital Markets, said.
Eni will be able to sell its remaining stake after a voluntary 90-day lock-up period following Tuesday's placements.
Amorim, which holds about 38 percent of Galp, has a call option on a 5 percent allotment in Galp held by Eni and the right of first refusal on an additional 5.34 percent.
Amorim is led by Portuguese entrepreneur Americo Amorim with participation by Angola's state oil company Sonangol.
Eni, which has committed to sell its Galp stake by the end of 2013, said in October it had received a lot of interest for Galp, but added the offers had not met its expectations.
($1 = 0.7733 euros)
(Additional reporting By Kylie MacLellan in London; Editing by Helen Massy-Beresford and Maureen Bavdek)