Eni repurchase bonds convertible into shares of Galp – publico

                 

                         
                     

                 

 
                         

Eni announced Thursday an offer to repurchase bonds convertible into shares of Galp. This is an issue launched in 2012 which expires in November and whose side the Italian oil company’s position in the Portuguese company:. 8% of the capital

                     

                         At issue are EUR 1028 million, of which the Italian oil company intends to repurchase a maximum of 515 million, or about half the issue, equivalent to 4% stake in Galp. In 2012 Eni announced that the conversion price of the bonds into shares should be around 15.5 euros.

In a statement it released on Thursday, the Italian company does not explain what to do with the titles Galp underlying bonds which are repurchased (and canceled), but the market has already anticipated to be sold: the titles of Galp followed down 1.05% to 10.8 euros, in the early afternoon. The operation is potentially bad for the Galp “because it could mean that ENI is preparing to put [the market] share of the 4% stake in Galp,” explained the analysts BESI in a research note cited by Reuters.

“We assume that will start selling the first tranche of 50% as well to complete the tender offer, while the second tranche could be [sold] in November, when the rest of the bonds mature” , said BESI. They are scenarios that put pressure on the Galp, at a time when the price of oil has also penalized the sector bonds.

According to the note published by Eni, holders obligations wishing to participate in the offer must make their proposals by the end of this afternoon, with the completion of the transaction should take place on 4 June.

According to ENI, the operation is being organized by Deutsche Bank, Mediobanca, Morgan Stanley and UBS.

In March last year Eni had sold 7% stake in Galp to institutional investors, fitting with the operation around EUR 702 million.

It is also in the form of convertible bonds that materializes the position of 7% that the state still holds in Galp, via Parpública. In 2010, under the fifth phase of the company’s privatization, the holding company that manages the State’s stake in companies held a bond issue of 900 million euros, maturing in 2017, which has as collateral 58 million shares of the oil.