October 5, 2018 / 1:52 PM / 2 months ago

Italian construction group Salini looks at possible Astaldi deal: sources

MILAN (Reuters) - Italy’s Salini Impregilo (SALI.MI) is working with Bank of America Merrill Lynch (BAC.N) and advisers Vitale & Co on options for a possible full or partial takeover of troubled builder Astaldi (AST.MI), sources close to the matter said.

Astaldi, hit by delays to plans to sell a bridge in Turkey, filed for court protection from creditors in September to allow it to continue business while restructuring its debt.

On Wednesday Salini, Italy’s biggest infrastructure builder by sales, said it was closely following developments involving companies in the construction sector in Italy and abroad, including Astaldi.

“They’re looking at options,” one of the two sources said on Friday, confirming a report in daily newspaper Il Messaggero.

Bank of America Merrill Lynch declined to comment while a Vitale & Co representative was not immediately available.

It was not clear if Salini was interested in the whole of the Astaldi group or only parts of the business.

Salini, which makes less than 10 percent of its revenue in Italy, is working with the Rome-based builder on a series of Italian projects, including a new metro line linking Milan to Linate airport and a high-speed railway line in the south.

Italy’s construction sector was one of the worst hit in Europe during the economic crisis, partly because of the relatively small size of its players.

On Friday the chairman of Italy’s biggest retail bank Intesa Sanpaolo (ISP.MI), one of Astaldi’s creditor banks, said he viewed any consolidation in the sector as positive.

“Any news that confirms the potential interest of Salini for the construction assets of Astaldi (or part of them) may make strategic sense in our view,” Mediobanca analysts said in a note on Friday.

Astaldi, one of Italy’s leading contractors with more than 10,500 employees, had been hoping to sell its 33.3 percent stake in the Third Bosphorus Bridge in Turkey to boost liquidity and reduce debt, which stood at 1.9 billion euros ($2.2 billion) at the end of June.

But political turmoil in Turkey and a plunge in the currency led to delays for a sale that was one of the conditions for launching a cash call of up to 300 million euros.

The company, which had also been planning asset sales of almost 800 million euros, said in its filing for creditor protection that targets set in its 2018-2022 strategy plan were no longer achievable.

Astaldi, which last year posted core earnings of 366 million euros, now has up to 120 days to present a new business plan to the court.

Sources said Astaldi was being advised by law firm Gianni, Origoni, Grippo, Cappelli & Partners and consultant Enrico Laghi.

Astaldi, Salini and Gianni, Origoni declined to comment.

Additional reporting by Stefano Bernabei; Editing by David Goodman

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