Eni confirms IPO of Plenitude on Euronext Milan

Italy's Eni confirmed Thursday that it intends to proceed with a planned flotation of shares in its Plenitude retail, renewables and e-mobility business on the Euronext Milan stock market.

The Plenitude IPO — which analysts expect in the next few weeks — is the latest part of Eni's strategy to unlock value from its various businesses this year. The company launched Var Energi — its Norway-focused upstream joint venture with private equity firm HitecVision — onto the Oslo stock exchange in mid-February, raising some $500mn in proceeds from the first tranche of shares that were floated. Eni said today that a further $530mn had been raised from a secondary placing of Var Energi shares. The company also floated an energy transition-focused special purpose acquisition company, or Spac, on the London Stock Exchange in March, raising £175mn ($230mn).

Plenitude, currently 100pc-owned by Eni, is an integrated business that combines renewable power, the sale of electricity, gas and energy services to domestic and business customers, and a European network of charging points for electric vehicles (EVs). At the end of March the business had an installed renewables generation capacity of approximately 1.4GW and a pipeline of renewable projects amounting to more than 10GW, according to Eni. It also has some 10mn retail clients and a network of around 7,300 EV charging points.

Eni said the IPO will enable Plenitude to diversify its ownership structure, create a long-term shareholder base and access competitive funding. Analysts at RBC Capital Markets said they had considered the Plenitude flotation as "a test case for the wider peer group" where others might follow suit if it proved a success. But they note that the world has change significantly since Eni announced its intention to float Plenitude last year and that energy executives — including Eni's chief executive Claudio Descalzi — have remarked in recent weeks that stakeholders need to be realistic about the energy transition.

Plenitude delivered adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of €0.6bn and cash flow from operations of €0.4bn. With its net debt standing at €1.6bn at the end of March, RBC values Plenitude at approximately €8.4bn. This is lower than the €9.6bn it initially valued the business at, but since then "renewables have de-rated and the retail power market has become much more challenged with more uncertainty", RBC analysts said.

By Jon Mainwaring