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Finmeccanica confirms disposal plans

LONDON (Reuters) - Finmeccanica SIFI.MI confirmed it was looking to sell assets worth about 1 billion euros ($1.23 billion) but declined to comment on reports it was talking to groups including Siemens SIEGn.DE and Hitachi 6501.T.

On Friday, industrial sources said the Italian aerospace and defense electronics group was expected to clinch at least one of two deals to sell some of its energy and transport assets by the end of the year.

“As we stated to our investors, we are thinking of disinvesting from non-core businesses and we are working on that,” Chief Executive Giuseppe Orsi told Reuters Insider Television in an interview ahead of the Farnborough Airshow.

“We said we would do some of those within the year and at the end of the year, we will say it. I expect that by the end of the year we will have achieved the sum of the targets we have set.”

The comments were made on Sunday but embargoed until Monday morning.

State-controlled Finmeccanica, which reported a loss of 2.3 billion euros in 2011, is expected to sell energy and transport units as it focuses on its core aerospace, helicopters and defense technology operations.

Sources close to the matter have said that Germany's Siemens is in talks to buy a stake in Ansaldo Energia, while trade union officials have said Japan's Hitachi is carrying out due diligence for transport unit AnsaldoBreda and possibly listed unit Ansaldo STS STS.MI.

Orsi and Chief Financial Officer Alessandro Pansa declined to comment on any details regarding possible sales.

He said the group should avoid any major impact from the latest round of public sector spending cuts in Italy while increasingly looking to growth markets in countries ranging from Russia to Brazil and China.

“Italy is not relinquishing its position of being an international player in defense systems and we believe that the spending review going on now will not impact dramatically our activities,” he told reporters in a briefing.

“We have programs there that are confirmed and we count on that as a basis for the international market,” he said.

He said the defense procurement budget for 2013 should return to “just under 5 billion euros”, around the level seen in 2011 after falling to 4 billion euros in 2012.

He also said Finmeccanica expected to gain a “significant part” of the 160 billion pounds ($248 billion) defense procurement budget set by the British government for the coming decade.


Since taking over last year in the wake of a corruption probe that brought down the previous chief executive Pier Francesco Guarguaglini, Orsi has himself been targeted by a bribery probe.

A disgruntled former employee has accused him of illicit payments over an Indian helicopter contract and giving 10 million euros in kickbacks to the Northern League party to gain political support.

Orsi has denied any wrongdoing and said he had only sketchy details of the investigation.

“I simply received (notice) a few weeks ago that they had asked for an extension of the investigation. That is the only official notice my lawyer has got,” he said.

He also dismissed speculation that Finmeccanica may have violated rules limiting the export of sensitive military technology following Wikileaks revelations that the group had sold its Tetra mobile communications equipment to Syria.

Finmeccanica said last week the equipment was for civilian use and said it had not sold any technology to Syria since the start of the Damascus government’s bloody crackdown on dissident groups.

“Whenever we want to export, we follow the procedures of the Italian export rules,” he said.

“So there is not any activity going on, either at the preliminary stage in countries where Italy and Europe... is not allowing an export of defense material. It’s as simple as that.”

($1=0.8126 euros=0.6449 British pounds)

Reporting by James Mackenzie; Editing by Mike Nesbit