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03/09/2012

Hera signs an agreement for FSI to acquire a stake in the multi-utility

The agreement, which will follow the appropriate clearances from the relevant Authorities, foresees an investment up to €100 million

Hera Spa has today accepted a proposal from Fondo Strategico Italiano Spa (FSI), a financial holding company 90% owned by Cassa Depositi e Prestiti (CDP), setting out the terms and conditions under which FSI will acquire a stake in Hera that could amount to around 6% of share capital. The agreement ensures that FSI will secure a significant presence among the Group's shareholders, strengthening its ownership structure.

FSI will acquire its stake by providing new funding for the Group, having agreed to take up any shares left unsubscribed (or to buy rights options) following an 80-million-share optional capital increase set to take place in the coming twelve months. The transaction will get underway following the finalisation of the integration with AcegasAps and once all necessary and appropriate clearances from the relevant authorities have been received.

FSI's articles of association specifically name the infrastructure and public services sector among its eight key investment industries and - in light of the merger with AcegasAps, its growth prospects and strategy up to this point - Hera is a perfect match for FSI's investment philosophy and criteria.

Hera is the first company in the public utilities sector that FSI has targeted for investment.

The Board of Directors at Hera sees FSI's proposal as an acknowledgement of the progress that the Group has made in its first decade of operations. Moreover, the Board regards the deal as a major opportunity to strengthen the Group's financial structure in view of the significant challenges that the multi-utility sector will face in the coming years, as well as the fresh opportunities for development that Hera intends to pursue in the business and territories that have generated the company's constant growth over the past 10 years.

The funding received as a result of FSI's investment is designed to enable consolidation of Hera's debt/EBITDA ratio to around three times following the integration with AcegasAps, maintaining it among the best in the industry. The funds will also ensure financial flexibility for the Group and make it possible to retain the management objectives set out in recent business plans or as a result of the various changes to the company's capital and financial structure. The expected synergies arising from the AcegasAps integration, as well as the anticipated returns on the use of the new funding, will more than offset the effect on earnings-per-share for current shareholders, both in the short- and medium-term.

The agreement with FSI requires Hera's shareholders to pass a resolution granting the Board of Directors the power to increase share capital, under market conditions, by a maximum of 80 million shares. Concurrently, FSI has undertaken to invest up to maximum €100 million, under the terms and conditions of the agreement, by taking up any shares left unsubscribed following the capital increase or by acquiring the related rights options. Hera shareholders and holders of convertible bonds will be able to choose whether or not to subscribe to the capital increase. FSI's investment must amount to a minimum of approximately 3% of Hera share capital by taking up leftover shares, or by acquiring rights options enabling subscription of at least 2.6%.

The agreement also stipulates that, given the level of capital it has undertaken to subscribe, FSI will be entitled to appoint a representative to Hera's Board of Directors. For this purpose, shareholders will be asked to resolve to increase the number of directors representing minority shareholders from 4 to 5. However, as of 2014 the number of board members representing minority shareholders will be reduced to 3, as previously agreed, in line with the reduction of the number of 'majority' board members to 12.

Lastly, the agreement is subject to the standard conditions applying to such transactions. Specifically, this includes receiving all necessary and appropriate clearances from the relevant authorities (both regarding this transaction and with regard to the CDP Group's other interests), as well as completion of the aggregation with AcegasAps, and prevailing normal business and market conditions.

Statement of Tomaso Tommasi di Vignano, Hera Group Chairman
"FSI makes long-term investments in key sectors and, as such, plays a major strategic role for this country. Meeting FSI's requirements on industrial capacity, financial stability and growth prospects is therefore a considerable testament to the Group's strategy so far," explained Tomaso Tommasi di Vignano, Hera Group Chairman. "Investment in Hera from such an important institutional investor will help to boost the company's growth prospects, including in view of any further opportunities for industry consolidation following the aggregation with AcegasAps, which in any case is a major step in this direction."

Statement of Maurizio Chiarini, Chief Executive Officer
"The major inflow of funds that will result from this agreement will allow us to pursue our upcoming growth objectives with even greater security in terms of maintaining an optimal financial structure," said Hera CEO Maurizio Chiarini. "Keeping a balanced debt ratio - without doubt one of the best in the industry at the moment - has always been of utmost importance in our business strategy and now, at a time of macroeconomic recession and low liquidity, is certainly a real point of differentiation among utility companies."

 
Online since 03-09-2012 at 17:48
 
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