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Italy could soon sell its stake in Eni to pay down debts, a source close to the matter told reporters – reported Oilprice.
The price of the stake in Eni has yet to be determined, and officials from Rome have declined to comment on the proposal. The Italian Treasury owns 4.34 percent of Eni.
"The idea is to get as much as possible as soon as possible, to cut the public debt causing the least possible political impact," the source said.
Italy’s financial goal for 2017 involved raising 3.4 billion euros to pay off public debt, an amount totaling to 130 percent of the national gross domestic product. So far, Rome is far behind on that fundraising agenda.
Oil and gas companies themselves have faced tough financial times in recent years as barrel prices hover in the $55-$60 range, compared to pre-2014 heights of over $100. In 2015 and 2016, analysts and credit watchers began asking tough questions about the sustainability of the generous shareholder payouts. Eni became the first to reduce its dividend in 2015. BP offered a scrip dividend to its shareholders, a half-measure that offers equity instead of cash. Statoil did the same.
But times have changed, and the oil majors have made a lot of progress in cutting costs and improving their financial health. The results are evident. BP and Statoil just announced in recent days that they would end their scrip dividend program and pay cash to shareholders. BP even said it would repurchase shares equivalent to the amount it issued during its scrip program.
The Italian government’s cash flow problem is more chronic and less related to the health of the world’s energy markets. Italy, Greece, and Spain have been grappling with slow economic growth and high unemployment since the global economic recession of 2008.
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