June 19, 2014 / 12:05 PM / 4 years ago

UPDATE 1-Enel draws interest for Slovenske Elektrarne stake -source

* Enel looking to mandate banks on Slovenske sale -source

* Slovenske enterprise value around 3.8 bln euros -banker

* Enel targeting asset sales of 4.4 bln euros in 2014 (Recasts lead, adds source, banker, CEZ comments, background)

By Stephen Jewkes

MILAN, June 19 (Reuters) - Italy’s Enel has received expressions of interest for its controlling stake in Slovakian generating company Slovenske Elektrarne, a source told Reuters on Thursday.

Europe’s most indebted utility aims to sell 4.4 billion euros ($6 billion) of assets to cut net debt to around 37 billion euros by year-end from 41.5 billion at the end of March.

“Several companies have expressed an interest and the group is now moving to mandate banks,” the source said.

Enel declined to comment.

Utilities across Europe have been struggling to keep debt under control as margins come under pressure from lower power demand and higher renewable energy output.

Enel Chief Executive Francesco Starace, who took over from predecessor Fulvio Conti in May, has said the group’s 66 percent stake in Slovenske could be considered for sale.

“Power prices in central Europe are stagnant and it makes sense for Enel to sell assets there. Numerically, it needs to sell Slovenske to reach its (debt) target,” a Milan banker said.

The banker said Slovenske had an enterprise value of around 3.8 billion euros, including debt of some 1 billion euros.

Russia’s state nuclear energy company Rosatom and Czech power producer CEZ could be interested in the stake, media reports have said.

“We are still interested in the Slovak market but will not comment on concrete possibilities,” a spokeswoman for CEZ said.

Chinese investors had also expressed interest in Enel’s Slovenske stake, said the source.

Enel, which owns Spanish utility Endesa, bought its stake in Slovenske Elektrarne in 2006 as part of the Slovak government’s privatisation drive.

Enel agreed to make significant investments to modernise Slovenske’s facilities, pledging to invest around 2 billion euros to complete two nuclear reactors. It recently said that amount had risen to around 3.8 billion euros.

The Slovak government has complained about delays in completing the work to upgrade the plant. Enel says the delays are due to nuclear stress tests imposed in the wake of the Fukushima crisis.

$1 = 0.7368 Euros Additional reporting by Jan Lopatka, editing by Oleg Vukmanovic; Editing by James Macharia

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