May 4, 2018 / 6:09 PM / 22 days ago

Sonnedix, F2i consortium among bidders for Italian solar assets: sources

MILAN/LONDON (Reuters) - Solar power producer Sonnedix and a consortium led by Italian infrastructure fund F2i are among at least six bidders that have submitted tentative offers for one of Italy’s largest collection of solar assets, sources familiar with the matter said.

The sale of Rete Rinnovabile, known as RTR, ranks as Italy’s largest M&A auction so far this year and could be worth up to 1.5 billion euros ($1.8 billion), the sources said on Friday.

Private equity investor Terra Firma, which has backed the company since 2011, plans to shortlist a group of final bidders in mid May as it wants to wrap up the auction during the summer, the sources said.

The bidding field mainly consists of Italian energy players while there has been moderate interest from international funds, they said.

A consortium of Italian utility Enel and infrastructure fund F2i has made a non-binding bid for the 334 megawatt portfolio and is vying with Italian energy companies ERG and A2A, the sources said.

A2A is currently bidding alone but it may later team up with another bidder to make its offer more attractive, they said.

Abu Dhabi’s Masdar Clean Tech Fund has decided to partner with Italian investment firm Tages, they said, and the duo made a non-binding bid ahead of a deadline on May 3.

Terra Firma, Enel, F2i, ERG, A2A and Tages declined to comment while Masdar was not immediately available to comment.

Other international bidders include Canadian investment fund AIMCo and solar power developer Sonnedix, which has 170 power plants in nine countries including Italy and Japan, while interest from Chinese firms has waned, the sources said.

AIMCo and Sonnedix were not immediately available for comment.

“There has been a good level of participation,” one of the sources said, adding Terra Firma had reached out to a wide range of bidders signing non-disclosure agreements with 80 to 90 possible suitors.

Two of the sources said Japan’s Mitsui had initially expressed an interest in RTR but it was unclear whether it went ahead and bid for the Italian firm.

Mitsui was not immediately available for comment.

International oil majors including BP have refrained from making an offer while Italy’s ENI - which is keen to grow in the renewable market - was initially in the race and held talks with Qatari investors for a joint bid, the sources said, cautioning there was opposition from ENI’s executives and a bid was unlikely to materialize.

On April 18 ENI boss Claudio Descalzi ruled out pursuing acquisitions to help the company’s green energy drive.

London-based Terra Firma hired UniCredit, JPMorgan and Jefferies last year to kick off an auction for RTR which owns 134 plants across Italy.

But its price expectations of about 1.5 billion euros may prove challenging for some of the bidders, the sources said, pointing to RTR’s debt of around 900 million euros.

The portfolio may fetch a final price of between 1.2 and 1.3 billion euros, they said.

RTR, which last year generated 478 gigawatt hours of power, reported core earnings of about 134 million euros in 2017. Subsidies accounted for 86 percent of its sales.

($1 = 0.8375 euros)

Reporting by Stephen Jewkes and Pamela Barbaglia; Editing by Susan Fenton

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