China's State Grid near deal for stake in Italian energy grid firm
Reuters in Milan
Italian state lender Cassa Depositi e Prestiti (CDP) is close to agreeing the sale of a 35 per cent stake in a vehicle controlling Italy's energy grids to State Grid Corp of China, people close to the matter said.
"CDP is in the final stages of talks to agree the sale of the stake to the Chinese group," one of the sources said on Monday.
As part of an Italian privatisation drive to reduce public debt, CDP is trying to sell up to 49 per cent of CDP Reti - the vehicle that controls gas grid Snam and, soon, power grid Terna.
The sale of a 35 per cent stake in CDP Reti to State Grid, the world's biggest state utility, could be reached within days, according to a second source.
CDP chief executive Giovanni Tempini is travelling to China with Italian Economy Minister Pier Padoan today and tomorrow.
According to one of the sources, a meeting has been organised between Tempini and State Grid executives.
Spokesmen for CDP and the Chinese company were not available for comment.
Sources have previously said that State Grid and Australia's Industry Funds Management were the only suitors interested in buying a significant stake in CDP Reti, although they did add the Italian lender was also seeking investment funds to buy smaller stakes.
Some concern has been expressed over State Grid having a stake in a vehicle controlling a rival like Terna, because of potential conflicts of interest.
Terna and State Grid are both interested in Greece's plans to sell a 66 per cent stake in power grid company ADMIE.
"Terna was unhappy at first, but under new management they've now come around to the fact they need to let CDP know what they don't want to see in terms of governance," a source with knowledge of the matter said.
Tempini, who has previously said he expected a decision on an investor in CDP Reti by the end of next month, said on Monday the energy grid vehicle was worth at least €6.8 billion (HK$71 billion).