Eni to launch IPO for retail and renewables business

Italy’s integrated energy company Eni announced that it has decided to list a minority stake in its newly merged gas & power retail and renewables business (ENI R&R) next year to help fund its shift away from its traditional oil & gas business. Eni said an initial public offering (IPO) is its preferred route to “crystallize the value of the business.”

In April, Eni approved the launch of a strategic project to either list through an IPO or sell a stake in the unit. The project aimed to identify the option that maximised the value of the business as part of the company’s wider commitment to delivering value through the energy transition and reaching net zero emissions.

Eni said it plans to complete the IPO in 2022, subject to market conditions. Eni will retain a majority stake in the listed company.

IPO is an important step to become net zero

“We have committed to being a leader in producing and selling completely decarbonized products and an IPO of Eni’s Retail & Renewables business is an important step towards this goal. Retail & Renewables is an exceptional business, which combines a growing pipeline of renewable capacity with an attractive and increasing customer base, and is uniquely positioned to meet the opportunities presented by the energy transition. An IPO will unlock significant value, positioning the business for growth and helping both Eni and its customers reach net zero emissions,” said Claudio Descalzi, CEO of Eni.

Eni R&R will be financially independent with its own balance sheet and an investment grade credit rating, allowing it to access debt at competitive costs and fund growth.

Since announcing the launch of the strategic project, Eni has merged its retail and renewables operations, expanded and de-risked the renewables pipeline through acquisitions, and established Eni R&R as the second largest Italian operator of electric vehicle (EV) charging points. The company is on target to develop more than 6 gigawatts (GW) of renewables capacity by 2025 and more than 15 GW by 2030, with its retail customer base growing from 10 million customers today to over 15 million over the same period, with EV charging points expected to increase from 5,000 to more than 30,000 by 2030. Eni R&R EBITDA is expected to grow from around EUR0.6 billion (USD0.69 billion) in 2021 to EUR1.2 billion (USD1.39 billion) in 2025.

Eni R&R is uniquely positioned due to its integrated business model, size, diversification and growth profile. Combining renewables production with a retail business creates cost synergies, stabilizes cash flow given the hedge between generation and retail sales, and creates opportunities to provide renewable power and services to customers, thus boosting return on capital, the company said.

Further updates on the business, including the new company name, will be announced on capital markets day on 22 November.

Livorno refinery to stop fuels production

In related news, Argus Media reported that Eni has told the trade union representing workers at its Livorno refinery, which has been operating since 1936, that the site will stop producing fuels permanently from next year. The Livorno refinery has a refining capacity of 105,000 barrels per day and mainly manufactures gasoline, fuel oil, lubricating base oils, and special products. Base oil production will continue. Eni produces SN 90, SN 150, SN 500 and bright stock in Livorno, which is supplied to domestic customers by truck, and to overseas markets by bulk and flexi-tank.