November 7, 2019 / 11:22 AM / 5 days ago

CORRECTED-Salini's new share sale kicks off Italy's plan to create building champion

(In Nov. 7 story, clarifies that stake being diluted is in Salini Impregilo)

MILAN, Nov 8 (Reuters) - Italian infrastructure group Salini Impregilo launched a strongly discounted sale of 600 million euros ($665 million) of new shares on Thursday as part of a state-backed Project Italy plan to create a national construction champion.

Salini is Italy’s largest builder and the plan will include the group’s proposed takeover of troubled rival Astaldi .

The shares sale, which is set to close later on Thursday, is expected to dilute Salini Costruttori’s stake in Salini Impregilo to around 44% while state lender Cassa Depositi e Prestiti (CDP) will have a stake of close to 19%, according to Kepler Cheuvreux estimates.

Project Italy aims to revive the ailing construction industry, using Salini Impregilo as a cornerstone of a plan that will aggregate other players.

Many smaller Italian builders are saddled with crippling debts and thousands have gone broke over the past decade.

Salini Impregilo has already secured commitments from CDP, Salini’s major family shareholder Salini Costruttori and three leading domestic lenders to buy up to 450 million euros of the overall placement.

The banks are expected to hold just over 11% of the company.

The remaining 150 million euros in the placement will be subscribed by other investors in a bookbuilding process underwritten by BofA Securities, Citigroup and Natixis.

The bookrunners on Thursday set a price range for the bookbuilding between 1.4 and 1.5 euros per share, corresponding to a 17-23% discount to Wednesday’s closing price.

According to Block Trade the books have already been covered.

In a statement Salini Impregilo said the amount of shares CDP and the banks bought could vary according to the outcome of the placement and the number shares requested by market investors.

At 1038 GMT Salini Impregilo shares were halted from trade, indicated down 9.16% at 1.626 euros per share. ($1 = 0.9024 euros) (Reporting by Elisa Anzolin, writing by Stephen Jewkes, editing by Susan Fenton)

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