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Eni challenges slower IPO trend with plans for green energy listing

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FILE PHOTO: The logo of Italian oil and gas group Eni is seen on the facade of its headquarters in Rome
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By Francesca Landini

MILAN (Reuters) -Italian energy company Eni plans to list its Plenitude retail and renewables business on the Milan stock exchange in the coming weeks, despite a slowdown in initial public offerings (IPO) on global markets.

Royal Bank of Canada calculates the unit could be valued at around 8.4 billion euros ($9 billion), including debt.

Eni's move on Thursday follows on from Italian electrode maker De Nora, which on Monday said it wanted to list this month, betting on investor interest for its green hydrogen business.

The group is also banking on investor appetite for energy transition ventures with its plans to list Plenitude, which combines electricity generation from renewables, the sale of electricity, gas and energy services to households and businesses, and a network of charging points for electric vehicles.

The global IPO market has had a major setback due to the war in Ukraine and its impact on economic growth, inflation and rising interest rates.

Proceeds from global listings have dropped 63% so far this year compared with the same period last year, with the London stock exchange experiencing a 99% drop in IPO proceeds, based on Refinitiv data.

Both European and U.S. listings paused after the Ukraine conflict started in February, with activity in Europe and the United States down 88% and 90% respectively in the first quarter of the year.

"We are expecting the IPO market to accelerate in the second half of the year. Not to the levels we saw in 2021, but still a significant pick-up," Gareth McCartney, UBS Global Co-Head of Equity Capital Markets said.

McCartney added investors remained selective and were looking for "good stories which offer liquidity", including secondary market themes such as mobility, energy transition and other ESG related topics.


Eni, which owns 100% of Plenitude, did not specify the amount of shares it would sell but said it would retain a majority stake in the business after the IPO.

"Partially selling the business will unlock significant value and accelerate its growth, helping Eni cut the Scope 3 emissions currently generated by our customers, a key step to achieving our net zero target," said Eni Chief Executive Claudio Descalzi in a statement.

Plenitude is committed to supply decarbonised energy to all its customers by 2040.

In November, Descalzi had said that the group was mulling the listing of up to 30% of Plenitude, depending on market conditions.

Plenitude recorded 4.4 billion euro ($4.7 billion) of sales and core earnings, excluding extraordinary items, of 212 million euros in the first quarter of this year. It had a 1.6 billion euro debt as of end-March.

It plans to more than double adjusted core earnings to 1.4 billion euros by 2025 from 0.6 billion in 2021, the unit said in a statement.

Plenitude targets a dividend pay-out of 25% of consolidated net income, with the first distribution expected in 2023.

Credit Suisse, Goldman Sachs and Mediobanca are acting as joint global coordinators and joint bookrunners.

BofA Securities, Barclays, BNP Paribas, Deutsche Bank, Equita and UniCredit are acting as joint bookrunners. Mediobanca is acting as sponsor and, together with UniCredit, they are also lead managers of the Italian public offering.

($1 = 0.9363 euros)

(Additional reporting by Pamela Barbaglia and Andres Gonzales, editing by Federico Maccioni, Keith Weir, Jane Merriman and David Evans)

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