Europe's Largest IPO Since 2007 Kicks Off with Enel Green

The energy company, which has more than 600 plants in operation or under construction, is valued at between $12.7 billion and $14.8 billion.

On Oct. 28 Italy's Enel began floating shares in its renewable energy subsidiary Enel Green Power. The public offering is set to last until October 29 ahead of an eventual listing in Milan and Madrid on November 4. It is Europe's biggest initial public offering (IPO) since 2007.

Enel said that its renuable energy arm was valued at between 9.0 billion euros and 10.5 billion euros (US$12.7 billion and $14.8 billion), with a price range of between 1.80 euros and 2.10 euros per share.

Enel is initially putting up 28.3% of Enel Green Power's shares, but may increase that to 32.5% if the offer is oversubscribed.

Eighty five percent of the shares are reserved for institutional investors, with the remaining 15% earmarked for private buyers.

Enel Green Power, founded in 2008, develops and manages energy generation from renewable sources and has more than 600 plants in operation or under construction around the world. It is currently number two in the sector behind Iberdrola Renovables, and Enel Greeen Power's IPO will be the biggest since the Spanish company's shares went public in 2007.

Analysts are sceptical that the sector will continue the stellar growth it has known until the economic crisis is overcome, since government subsidies have been cut. However, Enel's Managing Director Fulvio Conti said that Enel Green Power had a "production mix among the most efficient in the sector" and depended on government subsidies for less than 30% of its revenues.

Enel Green Power's installed capacity 5.7 gigawatts is composed of 44% hydro, 41% wind and 13% geothermic.

Currently present in 16 countries, Enel Green Power plans to invest more than five billion euros to expand its capacity to 9.2 gigawatts by 2014.

The IPO, which is expected to net Enel 3.4 billion euros, is part of a larger program of asset sales aimed at reducing Enel's debt from 50.87 billion euros in 2009 to 45 billion by the end of the year.

Copyright Agence France-Presse, 2010

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