Italian Treasury makes $9.5 billion from Enel sale

The Italian Treasury has raised 7.5 billion euros ($9.5 billion) from the sale of almost 20 percent of utility company Enel, with proceeds from the placement going to reduce Italy's debt mountain.
Economy Minister Domenico Siniscalco said on Saturday that demand from retail and institutional investors had been heavy, allowing the Treasury to price the sale at 6.64 euros per share - at the top of the original price range.
Enel shares closed at 6.66 euros on Friday.
"The placement has ended successfully. This was the largest operation of its kind in the world for the past four years," Siniscalco told a news conference.
The third tranche sale of Enel stock leaves the Treasury with a direct holding of around 30 percent of the former power monopoly, allowing it to maintain control.
The placement represented the first part of an ambitious privatisation programme announced by the government earlier this year that is likely to see everything from state television to the post office put on the block.
The plan envisages raising 120 billion euros by 2008 in a bid to cut Italy's debt mountain to below 100 percent of annual gross domestic product.
At the end of last year debt equalled 106.2 percent of GDP. In real terms, Italy has the third highest debt pile in the world after that of the United States and Japan.
The 7.5 billion euros raised from the Enel sale represents some 0.6 percent of Italian GDP.
Retail investors were allocated 470 million Enel shares - roughly 40 percent of the offering. That was up from an original allocation of at least 20 percent.
Institutional investors got 680 million shares - including 150 million shares set aside in an overallotment, or greenshoe, option for the banks handling the sale which can be exercised within 30 days after the offer closed.
Global demand from retail investors totalled 650 million shares while institutional investors sought 2.2 billion shares.
Siniscalco said banks involved in the placement would earn around 100 million euros in fees. The Treasury calculations are based on the assumption the greenshoe option will be exercised.
Italy started privatising Enel in November 1999 with the sale of a 32 percent stake which raised 16.6 billion euros. It sold a further 6.6 percent to banks a year ago in an auction.