By Francesca Landini
MILAN (Reuters) – Suitors have approached Eni over the potential sale of a second stake in its biofuel unit Enilive as the Italian group discusses the final details of a deal to sell a stake in the unit to KKR, two sources said on Thursday.
The disposal of another chunk of Enilive would be a further sign of investors’ confidence in Eni’s strategy of spinning off growth businesses in order to attract financial resources.
The Italian energy group in July entered talks with U.S. investment firm KKR over the sale of a 20-25% stake in Enilive, based on a valuation of the company of between 11.5 billion and 12.5 billion euros ($12.8-13.9 billion).
Three sources told Reuters that negotiations with KKR could end successfully in the next two or three weeks. One of the sources said that KKR would likely buy 20% of Enilive.
The source also said that Eni had been contacted by other suitors, including New York-headquartered investment firm Stonepeak, about the possibility of selling another minority stake in Enilive.
Eni, KKR and Stonepeak declined to comment on the matter.
Under its so-called ‘satellite’ strategy, the Italian group finalised a deal in March to open up the capital of its retail and renewable unit Plenitude to Swiss asset manager Energy Infrastructure Partners (EIP).
Enilive owns several biorefineries in Italy and abroad that produce biofuels using waste and vegetable oil partly coming from the group’s agri-business in several African countries.
The company also makes biomethane, offers smart mobility services and owns a network of more than 5,000 multi-fuel stations in Europe.
Enilive is expected to record core earnings of around 1.2 billion euros in 2025, up from 1 billion euros pencilled in for this year.
Biofuels, made from vegetable oil, waste cooking oil and grease, are expected to play a major role in decarbonising the truck, aviation and shipping sectors in coming years.
($1 = 0.8965 euros)
(Additional reporting by Isla Binnie; writing by Francesca Landini; Editing by Kirsten Donovan)
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