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Italian rail operator to press ahead with IPO regardless of referendum
December 1, 2016 / 5:30 PM / a year ago

Italian rail operator to press ahead with IPO regardless of referendum

MILAN (Reuters) - Unlike most company chiefs in Italy, the head of state railway operator Ferrovie dello Stato (IPO-FERRO.MI) says he is not too worried about a Dec. 4 referendum that could unseat Prime Minister Matteo Renzi’s government.

CEO Renato Mazzoncini said the company would press ahead with plans to spin off its high-speed and long-distance trains business by July and float at least 30 percent of the shares in the second half of 2017, regardless of the outcome of the vote.

“We have not slowed down our work for the listing,” Ferrovie’s Mazzoncini told Reuters in a phone interview on Thursday.

“Even if the referendum is followed by a difficult economic phase, the group is financially solid and can deal with any scenario with a lot less anxiety than other companies,” he said.

The business to be spun off has estimated annual revenue of about 2.4 billion euros ($2.6 billion) and core profit of 700 million euros, the group said in September.

Italian government bond yields have risen and stocks have fallen ahead of the referendum on constitutional reform because investors fear a Renzi defeat could spark political instability.

Renzi has promised to resign if the “No” wins, as predicted by polls before a blackout period was imposed on opinion surveys two weeks before the vote.

Much of corporate Italy has effectively ground to a halt due to the uncertainty. The post office (PST.MI) has postponed a planned share sale initially slated for September until after the vote.

    Oil company Eni (ENI.MI) has delayed the sale of its domestic retail business due to the upcoming vote, sources have said. And Italy’s largest bank UniCredit (CRDI.MI) will wait for the referendum before picking the buyer of its asset manager Pioneer, according to people close to the matter.

    “I hope the ‘Yes’ prevails, this would strengthen the central government and make life easier for us in our dealings with local authorities,” Mazzoncini said. “(But) we have our projects and we will go ahead.”

    Mazzoncini, who was appointed chairman of International Union of Railways (UIC) on Thursday, said the company wanted to expand abroad.

    After buying Greek rail company TRAINOSE this year, Ferrovie is looking at the possible privatization of the metro system in Athens. The Italian firm has also joined forces with Britain’s First Group to bid for the rail service between London and Edinburgh.

    Editing by David Clarke

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