Eni Aims To Significantly Up Liquidity From Snam Debt Repayment

Italian energy company Eni SpA (E) wants some cash consideration as part of its split from Snam SpA (SRG.MI) and to boost liquidity plans to retain a large portion of the debts Snam will pay back, said Chief Financial Officer Alessandro Bernini Friday.

Eni aims to "increase significantly" its liquidity in the event of more adverse conditions in the financial markets, said the CFO on a conference call to comment on first-quarter results. "The troubles on the financial markets are not over."

Italy's government has decided Eni must give up its controlling stake in the country's biggest natural gas grid Snam as part of efforts to reduce the country's energy costs and increase competition. Eni controls Snam with a stake of more than 52%, which is currently worth about EUR6.6 billion at stock market prices.

Snam used Eni to finance its debts but must repay Eni net debts of more EUR11 billion once the two companies split.

Friday, Eni's CFO said the Rome-based company will repay the debt with the highest interest rates while keeping the rest for liquidity.

Eni aims to have liquidity that covers the company's spending of at least one year, added Bernini on the call.

-By Liam Moloney, Dow Jones Newswires; [phone]; [e-mail]