April 28, 2020 / 3:51 PM / a month ago

Italian state lender to help companies raise capital, minister says

ROME (Reuters) - Italy is preparing measures to give state lender Cassa Depositi e Prestiti (CDP) the financial power to help companies raise capital and strengthen their balance sheets, Economy Minister Roberto Gualtieri said on Tuesday.

FILE PHOTO: Italy's Minister of Finance Roberto Gualtieri attends a one day Italo-Franco summit in Naples, Italy February 27, 2020. REUTERS/Ciro De Luca/File Photo

The euro zone’s third largest economy has been brought low by the COVID-19 epidemic and the government is struggling to avoid permanent damage to core industries as a result of a lockdown imposed to curb the contagion.

“We will enable CDP to carry out interventions in support of medium and large enterprises,” Gualtieri said in a parliamentary hearing on the government’s multi-year economic and budget forecasts.

Detailing some key measures in a new stimulus package due to be approved this week, Gualtieri told lawmakers Rome would set aside up to 50 billion euros (43.54 billion pounds) for this new equity fund for the state lender.

Two government sources told Reuters that CDP would be able to inject fresh resources in strategic firms through the fund, for which the Treasury would provide the initial capital.

CDP will also be able to increase the fund’s firepower by issuing debt guaranteed by the state, they said, asking not be named because of the sensitivity of the matter.

Earlier on Tuesday, Industry Minister Stefano Patuanelli said in a newspaper interview that CDP could invest in the energy, telecoms, automotive and shipyard industries.

CDP already owns 25.76% of oil giant Eni (ENI.MI), 29.85% of power grid Terna (TRN.MI), 71.64% of shipbuilder Fincantieri (FCT.MI) and 9.99% of former state phone monopoly Telecom Italia (TLIT.MI).

A government source said this month that CDP might also acquire a stake in Atlantia’s motorway unit Autostrade per l’Italia.

This would reduce the influence of the Benetton family over Autostrade, which ran the Genoa bridge that collapsed in 2018, killing 43 people. The Benettons control 30% of Atlantia.

The coalition of the anti-establishment 5-Star Movement and the centre-left PD party is also studying a second scheme worth some 5 billion euros to help smaller companies to absorb capital losses.

“We are working on a plan under which, for every 100,000 euros made available by the entrepreneur, the state can add capital up to another 100,000 euros,” Deputy Industry Minister Stefano Buffagni told Reuters.

“After 5 or 6 years the state withdraws as a stakeholder but doesn’t ask for its money back, leaving the company with bigger capitalization,” Buffagni added.

Reporting by Giuseppe Fonte, editing by Gavin Jones and Mark Potter

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