Finmeccanica shortlists two for rail assets - CEO

ROME, Oct 8 (Reuters) - Italy's Finmeccanica (Other OTC: FINMF - news) has shortlisted two bidders for the rail assets it has put up for sale to cut debt and focus on its core aerospace and defence businesses, CEO Mauro Moretti said on Wednesday.

Moretti said on the sidelines of an event in Rome that Finmeccanica, which is being advised by UBS (NYSEArca: FBGX - news) and Mediobanca (Milan: MB.MI - news) , will pick the winning bidder by the end of October, or early in November. He did not disclose any names.

Japanese newspaper Nikkei reported earlier this month that industrial giant Hitachi (Other OTC: HTHIF - news) and China CNR Corp were the two finalists.

State-controlled Finmeccanica put its cash-burning train unit Ansaldo Breda and its stake in rail signalling firm Ansaldo STS on sale more than three years ago but political meddling and a corruption scandal has delayed the process.

Sources close to the sale said in August that Canadian firm Bombardier (Toronto: BBD-A.TO - news) and Hitachi were the two frontrunners. Bombardier has since pulled out of the race, according to two sources familiar with the matter.

Selling the two Ansaldo units is crucial for Finmeccanica if it wants to complete its turnaround. Rating agencies have already cut the company's debt to junk status, making it harder for the group to compete for contracts on international markets.

Standard & Poor's warned last week it could lower Finmeccanica's rating by one notch if its credit fundamentals did not improve steadily throughout 2015 thanks to the restructuring and disposal plan. (Reporting by Roberto Landucci; writing by Danilo Masoni; editing by David Clarke)