Enel SpA (ENEL.MI) mulls merging its Spanish renewable assets with those of its
Endesa SA (ELE.MC) unit to form a new renewable company owned by the Italian
utility, people familiar with the matter said Thursday.
If a possible
deal is concluded, the assets will be majority-owned by Enel Green Power SpA,
said the sources, who asked not to be named. The assets won't be sold separately
to investors, one of the people said.
Enel plans to sell a minority
stake in Enel Green Power this year, Chief Executive Fulvio Conti said last
week. Enel became Europe's most indebted utility after an international
acquisition spree that included the takeover of Spain's Endesa, in which it now
owns 92%.
The Italian utility has pledged to cut its net debt to EUR45
billion by the end of this year from the EUR51 billion of last December, aided
by the Enel Green Power sale.
Enel's renewable assets in Spain are held
in an equally- split joint venture, called Eufer, with Spanish energy company
Gas Natural SDG SA (GAS.MC).
It isn't fair to assume that the Eufer
venture will be split should the Spanish renewables integration happen, one of
the sources said.
In any case, Gas Natural has no intention to sell its
50% stake in Eufer to Enel, another source said.
Gas Natural lags behind
other Spanish utilities in the very lucrative generation of renewable power in
Spain, which has priority over other sources and gains hefty subsidies.
Last year, renewables excluding hydroelectric power only represented
6.4% of Gas Natural's electricity output, which is heavily dominated by
gas-fired production.
However, due to the economic downturn and a surge
in renewable power, Spanish gas-fired power stations in 2009 operated well below
their generation capacity, leading to a 22% plunge in Gas Natural's output from
natural gas last year.
Earlier Thursday, Endesa said it is studying with
Enel the possibility of combining their renewable energy assets. It added no
decision has been taken.