Astaldi - Project Italy this weekend
Thoughts:
Clearly a plan of this magnitude and complexity should be brought with execution risk. But we think that its precisely for the magnitude and complexity that the plan has effectively become too big to fail and that therefore the risk is far lower than meets the eye. We therefore continue with our long position in the bonds. Please find our analysis unchanged here. For a lot more detail on Astaldi, please call the desk.
Timing:
Tomorrow (Monday morning before 8am) is the big deadline on Progetto Italia. Astaldi will have to submit - with the backing of Salini - its restructuring plan under the maximally extended Concordato in Bianco.
Detail:
The plan that initially focussed only on the acquisition of Astaldi’s principal order portfolio and splitting off its concessions into a separate vehicle (bonds) has on the “suggestion" of Casa Depositi e Prestiti morphed to a E1.2bn Project Italy to include CMC di Ravenna, Condotte, as well as Trevi. Astaldi would only be the first step.
Capital: The latest version of the overall little changed plan allegedly foresees Astaldi raising E600m in a rights issue (E300m from Casa Depositi e Prestiti, E150m underwritten by Unicredit, BNP and Monte dei Paschi and E150m via a public book build.
Corporate Governance: This has been a subject of intense debate. The latest rumours have it that the company will be lead by a board of 15 members. Salini is to name 9 and Casa Depositi e Prestiti names 5, with the remaining one named by the banks. Crucially however, the 5 members representing Casa Depositi e Prestiti will appoint the chairman. Currently in the running for the job is rumoured to be Claudio Costamagna, Ex GS Chairman for EMEA, Italian banker and businessman, former Chairman of Casa Depositi e Prestiti and now Chairman of Salini. What a fit. But more important than the detail per se we find it comforting that the detail exists.
No further detail:
Crucially, there is still no public information with any finer detail on the plan.
Wolfgang