Reuters
Reuters
MILAN (Reuters Breakingviews) – Saipem boss Francesco Caio finally has some positive news for investors. The loss-making Italian energy-services company agreed on Wednesday https://www.saipem.com/en/media/press-releases/2022-06-01/saipem-signs-agreement-kca-deutag-sale-drilling-onshore-business?referral=%2Fen%2Fmedia%2Fpress-releases to sell its onshore drilling business to British rival KCA Deutag https://www.kcadeutag.com/media/news/Pages/KCA-Deutag-signs-SPA-to-purchase-the-Saipem-Onshore-Drilling-business.aspx for $550 million plus 10% of the enlarged group. That equity stake lifts the division’s price tag to around 600 million euros, Bestinver analysts reckon, above a mooted 500 million euros. At roughly 5.4 times next year’s forecast EBITDA of 110 million euros, the valuation is well ahead of Saipem’s 4.4 times multiple, Refinitiv data show.
Caio making good on his promise to sell should reassure Saipem investors, who include oil major Eni, ahead of a crucial cash call. The company, now worth just 1.2 billion euros, is about to launch a 2 billion euro capital increase after large writedowns on the value of its contracts plunged it into the red. The disposal is a first step towards ensuring the whip-round goes smoothly. (By Lisa Jucca)
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
Follow @Breakingviews https://twitter.com/Breakingviews on Twitter
Capital Calls – More concise insights on global finance:
Peltz board seat bolsters Unilever’s M&A brand
Twitter gives investors the snub they deserve
Pru extends Hong Kong adventure with CEO pick
Glencore has $10 bln reason to change its spots
Zero-Covid China gives Airbnb excuse to check out
(Editing by Ed Cropley and Streisand Neto)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
This news is republished from another source. You can check the original article here
Be the first to comment