July 21, 2014 / 10:01 PM / 3 years ago

UPDATE 1-Italy's CDP energy network sale to China State Grid near-sources

* CDP in final stages to sell 35 pct of Italy grids, sources said

* CEO to meet China Grid execs this week, sources added

* CDP Reti worth at least 6.8 bln euros (Adds quotes from sources, value, background)

MILAN, July 21 (Reuters) - Italian state lender Cassa Depositi e Prestiti (CDP) is close to agreeing the sale of a 35 percent stake in a vehicle controlling Italy’s energy grids to the State Grid Corporation of China, sources close to the matter said on Monday.

“CDP is in the final stages of talks to agree the sale of the stake to the Chinese group,” one of the sources said.

As part of an Italian privatisation drive to cut public debt, CDP is trying to sell up to 49 percent of CDP Reti - the vehicle that controls gas grid Snam, and soon, power grid Terna.

The sale of a 35 percent stake in CDP Reti to the Chinese group could be reached within days, a second source familiar with the matter said.

CDP’s Chief Executive Giovanni Gorno Tempini is travelling to China with Italian Economy Minister Pier Carlo Padoan on Wednesday and Thursday. According to one of the sources, a meeting has been organised between Gorno Tempini and executives of the State Grid Corporation of China (SGCC).

CDP was not immediately available to comment while CSGCC did not immediately reply to an email seeking comment.

Sources have previously told Reuters that SGCC and Australia’s Industry Funds Management were the only suitors interested in buying a significant stake in CDP, though they did add CDP was also seeking investment funds to buy smaller stakes.

Some concern has been expressed over SGCC, the world’s biggest state utility, having a stake in a vehicle controlling a rival like Terna because of potential conflicts of interest.

Terna and SGCC are both interested in Greece’s plans to sell a 66 percent stake in power grid company ADMIE.

“Terna was unhappy at first, but under new management they’ve now come around to the fact they need to let CDP know what they don’t want to see in terms of governance,” a source with knowledge of the matter said.

CDP Chief Executive Gorno Tempini, who has previously said he expects a decision on an investor in CDP Reti by the end of August, said on Monday the energy grid vehicle was worth at least 6.8 billion euros ($9.2 billion). ($1 = 0.7395 Euro) (Reporting by Francesca Landini, Luca Trogni and Stephen Jewkes; editing by G Crosse)

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