The privatizations launched in the nineties
In the early nineties our country began a programme to privatize some of the largest public companies in the Euro zone. This programme continued into the first half of the next decade (see Summary Table of Privatizations from 1 January 1994 to 31 December 2010(PDF, 194 KB))
Between 1992 and 2005 it involved about 30 public companies and created a total of around 100 billion euros of State revenue. The resulting debt reduction – which went, relative to GDP, from 121 percent in 1994 to 106.4 percent in 2005 – led to a cumulative decrease of around 30 billion euros of interest expenditure.
There were multiple reasons prompting Italy to plan and implement such a broad process of divestment of public companies: the most important was precisely the need to significantly reduce national debt. This objective was pursued in the light of in-depth cost-benefit analyses.
In Italy, this significant privatization process undoubtedly also favoured the development of the capital market, the spread of share purchases among investors, and an increased efficiency of privatized companies.
The "Destination Italy" Project
More recently, in autumn 2013, the Government announced the beginning of a new phase of privatizations by launching the "Destination Italy" project. This was aimed at attracting foreign investment and promoting the competitiveness of Italian companies.
The measures envisaged included the objective of "increasing the value of State-participated companies also through a divestment plan."
With reference to companies directly or indirectly controlled by the State, "Destination Italy" entrusted the Ministry of Economy and Finance (MEF) with the task of identifying, by the end of 2013, participated companies with which to begin divestments.
In this regard, the MEF, in agreement with the other relevant ministries and the Presidency of the Council of Ministers, conducted a careful analysis of its own portfolio, concluding that it could proceed with the divestment of shares in the Italian Post Office, ENAV, STMicroelectronics and ENI.
The Government at the time was also favourable to concrete cases of divestment of shares through its subsidiaries. In particular, the reference is to the State Railways (Major Stations and Centostazioni) and to Cassa Depositi e Prestiti (CDP) with the opening to private capital of CDP Networks – the holding company which owns controlling stakes in Snam and Terna – Fincantieri and Sace.
Completed and ongoing initiatives of the present legislature
The current "Renzi" Government added further interventions for ENEL and State Railways to the initially outlined privatization programme whereas, as from 2015 MEF press release , there will be no placement of Eni shares on the market.
Furthermore, the divestment of shares in companies in which the State owns shares indirectly, through CDP (SACE, FINCANTIERI, CDP Reti, TAG, and the State Railways (Major Stations, Cento Stazioni, - the branch which manages electric railways), were confirmed and increased.
The sale of a minority stake in Rai Way, held through RAI, was added to the above.
According to law, as regards shareholdings directly held by the Ministry of Economy and Finance, the proceeds of these divestments will be used to reduce public debt. Instead, second level proceeds will be used to increase the capital of the parent company (a part of these proceeds may also be used to pay the public shareholder a dividend).
With regard to the privatization of directly controlled companies, two decreesCollegamento a pagina interna (DPCM) were issued in May 2014 regulating the sale of up to 40 percent of Italian Post Office capital and up to 49 percent of ENAV capital through IPOs which will involve investors and employees of the two companies.
The listing of Poste Italiane was completed in October 2015 with positive results.
The IPO of ENAV successfully ended on July the 21th with demand that was approximately 8 times over the offer.
In reference to the divestment of its stake in STMicroelectronics Holding, in compliance with the commitments defined in the shareholders' agreements entered into with the public French shareholder (with whom it exercises joint control on equal terms of the holding company), the Company may be transferred to a public entity. The Italian Strategic Fund (a part of the CDP Group of Companies), or one of its subsidiaries, has been identified as this entity.
In February 2015, the MEF allocated, through accelerated book building, a stake of ENEL shares equal to 5.74% of the company's capital, to leading national and international banks; thus reducing its stake from 31.24% to 25.50%. The payment for ENEL shares amounted to approximately 2.2 billion euros.
The preparatory activities for the privatization of the State Railways also began, in agreement with the Company and the Ministry of Infrastructure and Transport, in order to identify the most suitable means to realize the privatization.
In reference to companies indirectly controlled by the Ministry, the following divestments were concluded in 2014:
- CDP shares of Fincantieri through the placement on the market – mostly for savers - of around 30% of newly issued shares in capital increase, equivalent to around 350 million euros;
- 35% of CDP's stake in CDP Networks(which holds around 30% of Snam and Terna shares) to the State Grid Corporation of China, equivalent to around 2.1 billion euros;
- CDP Gas srl's stake (a company owned entirely by CDP) in Trans Austria Gasleitung GmbH - TAG to SNAM SpA, equivalent to around 505 million euros;
- RAI shares of RAI Way and sale of about 30% of the share capital, equivalent to around 300 million.
Information on single privatization transactions not covered by confidentiality obligations is circulated through Press Releases and Notices published on the MEF website (www.mef.gov.itCollegamento a sito esterno) and/ or on the websites of the companies involved..
See the Reports to Parliament - November 2016 for the latest transactions concluded.
Previous Reports are available on the Italian website.