(Reuters) – Eni is in talks with a potential buyer of a majority stake in its Versalis chemicals business part of the Italian oil company’s plans to slim down and focus on oil and gas exploration.
Two trade union leaders said on Thursday an Eni board meeting was expected to give the go ahead to exclusive talks with U.S. investment firm SK Capital.
Eni CEO Claudio Descalzi, talking to reporters on the sidelines of a meeting, said talks were under way with a bidder for Versalis but also said they could be extended to other possible buyers.
“We have in the past spoken to more than one party, at the moment we’re speaking to one.” The CEO said nothing had been decided yet.
The state-controlled energy group has pledged to sell 8 billion euros ($8.7 bln) of assets over the next four years to help fund growth and support shareholder returns.
“We need to find funds to help develop the business,” Descalzi said.
Descalzi, a former head of Eni’s upstream exploration and production division, denied Versalis was on the agenda of Eni’s board meeting on Thursday.
SK Capital, which focuses on investments in speciality materials, chemicals and healthcare sectors, could not be reached for comment.
Eni said in October it was looking for a partner to help it run Versalis, which one Milan analyst said had an enterprise value of around 1.5 billion euros.
Descalzi said a series of guarantees and pre-conditions put in place made a sale more difficult. These included keeping Versalis whole for five years, not cutting the workforce for three, and keeping the company in Italy.
Eni has spent time and money turning around Versalis by refocusing the business on speciality and green products and promoting its international development.
Since 2000, the division has consumed 5.8 billion euros in cash, recorded net operating losses of more than 3 billion euros and staff numbers have dropped to 4,000 from 14,000, Eni said.
Europe’s chemicals companies are facing major challenges as the industry increasingly moves eastward drawn by economic growth and market opportunities in Asia. ($1 = 0.9220 euros) (Reporting by Giancarlo Navach and Stephen Jewkes; Writing by Agnieszka Flak; Editing by David Holmes and Jane Merriman)
The investment enables the steam cracker to increase the share of renewable and recycled raw materials used in its (ethylene and propylene) production. The move supports the Borealis Strategy 2030 for a circular economy. The Porvoo investment program is expected to be completed in 2025.
Murray Auchincloss, bp’s CEO, said in a statement: “As I set out in February, BP’s destination from IOC [international oil company] to IEC [integrated energy company] is unchanged – and we need to deliver as a simpler, more focused, and higher-value company.
Founded in 1972, Tecnofilm has expanded its product portfolio over the years to offer a wider range of compounds and functional polymers for various industrial applications and technical articles. The company has patented several of its products.
