Italians Join the IPO Flurry

Blink, these days, and you might miss a European carrier IPO announcement.

With a successful French offering already launched this year, and the Irish and Belgian incumbents about to list their shares, Italian utility group Enel SpA has announced an IPO of its wholly owned operator, Wind Telecomunicazioni SpA (see Investors Go Mad for Free Shares and Euro Carrier IPOs Imminent).

Enel CEO Paolo Scaroni announced this morning that the flotation would happen in the first half of 2005, but that no further details were available at present. The move is part of a broader strategy to focus on the company's core power businesses. Enel took total control of Wind a year ago so that it could control the operator's destiny (see Enel Blows €1.3B on Wind ).

Wind, which provides fixed and mobile services, had revenues of €2.12 billion (US$2.63 billion) in the first half of 2003, and a net loss of €305 million ($378 million). Enel expects the national operator to show a net profit before the IPO.

Over in Ireland, national operator Eircom Ltd. has announced details of its impending IPO. The range for its shares will be between €1.48 and €1.75, with the final price to be announced on March 18 and the shares to be traded from March 19 in Dublin and London. The top-of-the-range price would value the company at about €1.26 billion.

The operator plans to pay a dividend of 11 cents per share at the end of March 2005, a payment that would eat up about half of its projected free cash flow. It is this aggressive dividend policy that led Standard & Poor’s to downgrade the credit rating of Eircom's owner, Valentia Telecommunications (see Valentia Ratings Cut to BB+).

— Ray Le Maistre, International Editor, Boardwatch

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