Fitch affirms Enel ratings, welcomes assets disposal plan

A logo of Italian multinational energy company Enel is seen in Milan
A logo of Italian multinational energy company Enel is seen at the Milan headquarters, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo

MILAN, Feb 2 (Reuters) - Credit rating agency Fitch on Thursday affirmed Enel's long-term ratings, saying Italy's biggest utility would be able to cut its net debt through a planned 21 billion euro asset disposal plan.

The group said in November it would exit from Argentina and Peru and sell assets in Romania and other countries to focus on six main markets in Europe and the Americas.

State-controlled Enel's debt had climbed to 69 billion euros at the end of September and the group aims to lower it to 51-52 billion euros by the end of this year, it said when it presented its 2023-25 strategy.

"Reduced exposure to Latin America after the sale of assets in Peru and Argentina, its exit from eastern Europe and a lower exposure to the gas value chain would moderately improve the group's business profile and simplify its structure," Fitch said in a statement.

The agency affirmed 'BBB+' issuer default ratings for both Enel (ENEI.MI) and its Spanish subsidiary Endesa. The outlooks on the ratings are stable.

"Enel is a frontrunner in energy transition, which we expect to reward the group with healthy earnings in the medium-to-long term, with an increased focus on geographies where its own clean generation can match its supply volumes," Fitch said.

The credit agency expects Enel will post an average core profit of 19.9 billion euros between 2023 and 2025 and expects Endesa to contribute around a quarter of the group's earnings before interest, taxes, depreciation and amortisation (EBITDA) by 2025.

Reporting by Francesca Landini, editing by Gavin Jones

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