Enel to Sell Up to 40% of Renewable-Energy Unit

By Jerrold Colten and Armorel Kenna

Dec. 5 (Bloomberg) -- Enel SpA, Italy’s biggest utility, plans to sell as much as 40 percent of its renewable-energy unit for 2.5 billion euros ($3.2 billion).

The sale will be completed by the end of next year, according to a company official who declined to be identified in line with policy.

Chief Executive Officer Fulvio Conti said Nov. 11 that the Rome-based utility may sell a minority stake in Enel Green Power if market conditions remain unfavorable for selling shares.

Earlier this year, Enel announced plans to take advantage of government incentives for renewable energy by selling a part of its green business and separating it from the company’s traditional operations of generating power from coal, gas and fuel oil sources.

The utility will spend 6.8 billion euros in the five years through 2012 on technologies such as wind farms, solar power, and carbon capture and storage, according to a March presentation.

Enel slipped as much as 2.9 percent today after Deutsche Bank AG lowered its recommendation on the stock to “sell” from “buy,” citing a deteriorating financial outlook. The bank expressed concerns that the company’s plan to sell as much as 5 billion euros of assets next year could be achieved.

“The successful implementation of those disposals is doubtful,” Madrid-based Deutsche Bank analyst Virginia Sanz De Madrid wrote in a note yesterday. The bank cut its price estimate on the stock 44 percent to 4 euros.