Italian Saipem sets terms for fundraising, shares fall 15%

A Saipem logo is seen on the deck of the deepwater drilling vessel Saipem 10000 in the port of Genoa, Italy, November 19, 2015. REUTERS/Alessandro Garofalo

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  • New shares offered at 1.013 euros each
  • The Capital Hike will run from June 27 to July 11
  • Main investors, banks advance 1.5 billion euros

MILAN, June 22 (Reuters) – Italian energy services group Saipem (SPMI.MI) said on Wednesday it would launch a planned 2 billion euro ($2.10 billion) rights issue from June 27. June as it strives to strengthen its finances and refocus its business after a surprise earnings warning in January.

The move is part of a plan to put the group back in the dark after slashing its profits by 1 billion euros due to a sharp deterioration in margins on contracts whose offshore wind.

The capital increase, which will only be carried out in the event of full subscription, must run until July 11.

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The new shares will be offered at an issue price of 1.013 euros each to ordinary shareholders and savers on the basis of 95 new shares for 1 ordinary or savings share held.

The group, controlled by Eni (ENI.MI) and state lender CDP, said the subscription price includes a discount of around 30% to the so-called theoretical price excluding rights (TERP) calculated on the price of benchmark of shares as of June 21. .

Saipem said in March that its two main investors and banks would advance 1.5 billion euros of the capital increase.

In a press release published on Wednesday, the group indicated that Eni and CDP had committed to subscribe 44% of the capital increase while the banks had committed to subscribe all unexercised rights up to 1.12 billion. euros.

Saipem shares fell 13.5% at 0744 GMT, underperforming the European oil and gas index (.SXEP) which fell 3%.

“The capital rise is hyper-dilutive and there are concerns that investors could lose money in the remote event that the rights issue is not fully subscribed,” said Bestinver analyst Marco Opipari.

Saipem said in March that it plans to cut costs and focus more on its legacy offshore engineering and construction (E&C) business, where it expects 8% annual growth, particularly in the Middle East and Africa.

The group announced earlier this month the sale of its onshore drilling business to Britain’s KCA Deutag (KCAD) for $550 million, also as part of the turnaround plan. Read more

Liquefied natural gas will be at the center of onshore activity at a time when a global scramble for more oil and gas after Russia’s invasion of Ukraine is reshaping the energy market.

($1 = 0.9527 euros)

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Additional reporting Giancarlo Navach, graphic by Stefano Bernabei, editing by Giulia Segreti and Elaine Hardcastle

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