O&M

AEM to Up Stake in Edipower to 16 %

Aug. 13, 2003 – Milan-based utility AEM (AEMI.MI) plans to increase its stake in energy consortium Edipower to 16 per cent from 13.4 per cent in a capital increase, paying with debt, ratings agency Standard & Poor’s said on Tuesday.

Nobody at AEM was immediately available to comment. S&P said in a statement that it would not change its “A” rating on AEM’s debt after “the company’s decision to increase its interest in Edipower to 16 per cent from 13.4 per cent”.

Edipower is a group of energy firms and banks created last year to buy generating company Eurogen from Italy’s top utility Enel for EUR3.7 billion. It is now raising EUR1 billion in a capital increase to help refinance the deal.

AEM is controlled by the city of Milan, whose mayor Gabriele Albertini said last month he was open to increasing AEM’s stake in Edipower if fellow shareholder AEM Torino decided not to pump more money in to the capital increase.

The capital increase runs until August 27 and together with a new EUR2.3 billion bank loan will refinance Edipower’s EUR3.3 billion of outstanding debt.

“AEM will contribute EUR185 million to the total capital increase, which will raise its stake by EUR51 million, funded through debt,” S&P said, adding AEM could afford the investment.

Edipower is 40 per cent-owned by Italy’s number two power group Edison (EDN.MI), which also owns five percent of AEM.

AEM, AEM Torino, Switzerland’s Atel split another 40 per cent between them with the other 20 per cent in the hands of UniCredito, Royal Bank of Scotland and Interbanca.