Ansaldo Energia Banks Hire PJT, Clifford Chance for Debt Talks; Company Considers Capital Increase, New Bonding Lines, Capital Structure Rebalancing

Ansaldo Energia’s banks have hired PJT Partners and Clifford Chance as their financial and legal advisors for debt talks, sources told Reorg. The first meeting between the Italian power engineering company and its lenders took place last week.

Ansaldo is proposing an amend-and-extend deal to its banks and is aiming to close the operation before April 28, when its €260 million 2.875% bond is due, sources said.

The company is expected to ask its shareholders to subscribe to a capital increase in support of its new 2020-2024 business plan and repay its 2020 bond, sources said. The company has not indicated an amount for the capital raise.

On Feb. 5, Ansaldo Energia’s board approved the company’s business plan focusing on cost reduction, the rationalization of stakes in several subsidiaries, the sale of some assets, and a “rebalancing of its capital structure,” as reported.

Regarding asset sales, Mubadala, Abu Dhabi’s sovereign wealth fund which invested in Piaggio Aerospace, might be interested in acquiring Ansaldo’s U.S. subsidiary Psm for about €150 million, Italian daily Il Corriere della Sera reported. Other potential bidders may include Russia’s Gazprom and the Finnish company Sulzer.

Should Ansaldo be unable to sell its U.S. subsidiary, the amount of its capital increase may reach up to €500 million to €550 million, sources said.

It’s still unclear who would subscribe to the potential capital raise: whether it would only be Cassa Depositi e Prestiti (CDP), which already owns 60% of the group, or both CDP and Shanghai Electric, which owns the remaining 40% stake, as reported.

Ansaldo is considering how to rightsize its capital structure which might involve changes to the facilities it currently has, sources said. A key focus for bank lenders is to be treated pari passu with other unsecured creditors, sources added.

Ansaldo has about €1 billion of bonding lines, according to sources. To implement the company’s business plan, this number will have to increase, they added.

At the end of December, Ansaldo received a letter of comfort from CDP in support of the development of the new business plan. Shanghai Electric Group has also been “invited to support” the plan.

Certain international lenders have been trying to sell their exposure to Ansaldo’s €360 million RCF in the 70-80 range, with some banks willing to consider the possibility of exiting in the 60s too, as reported. The facility was offered in November 2019 in the 90s. No trades have taken place so far.

Ansaldo Energia is working with Vitale&Co as its financial advisor and Chiomenti and Andrea Zoppini as legal advisors.
 
--Luca Rossi