Saipem is considering a restructuring package worth around 4 billion euros which could include a capital increase of around 2 billion euros, the renegotiation of a 1 billion credit line and the collection of another billion from the sale of one of the its drilling divisions. These are the rumors reported by the American financial agency Bloomberg not yet confirmed by the Italian energy engineering company. Rumors that had initially caused ground to recover on the Stock Exchange, but which have already deflated: at 11,15, Saipem shares are down -1,64% to 1,14 euros when the Ftse Mib drops 0,27%.
The support to Saipem became necessary after the announcement on January 31 of a worse-than-expected loss for 2021 and greater than a third of the share capital (over 700 million euros), resulting in the loss of over 40% of its value in stock exchange, with a capitalization that has dwindled to 1,1 billion euros. The deliberations are underway and no final decision on the capital increase, on the extension of the financing (among other things, the company has 500 million euros of bonds maturing in early April) or on any sale has been taken. The revision plan will be announced on March 15 with the presentation of the new business plan, while the 2021 results will be released at the board meeting scheduled for Wednesday 23 February.
In January, the firm said it would consider a capital raise and talk to its creditors after issuing a "profit warning." Saipem's two main shareholders – Cassa Depositi e Prestiti with 12,5% and oil and gas company Eni with 30%, also controlled by the state – have been monitoring the situation closely. In recent days, the two partners wanted to strengthen the management of the company led by Francesco Caio, inserting Alessandro Clean as general manager, while Paul Calcagnini of CDP has been appointed to lead a new oversight unit on financial planning and control.
The collapse of Saipem: causes
But what brought the budget red? The company led by Francesco Caio is struggling to cope with the rise in raw material prices, disruptions in logistics and has had to deal with the freezing of many exploration and extraction activities caused by the pandemic crisis. Many green energy projects have also faced several delays. The stoppage of works in Mozambique - commissioned by the French group Total - also weighed on the budget, which caused a reduction in revenues of more than one billion euros.
Saipem and Algeria's maxi fine
Another tile hanging over Saipem is the 192 million euro fine by the Court of Algiers, while the Court of Milan had definitively acquitted the company, for the same facts, on December 14, 2020. The fine concerns the LNG3 order in Algeria awarded in 2008 to Saipem, Saipem Contracting Algérie and Snamprogetti Algeria Branch, completed today. The three companies were accused of: "increasing prices on the occasion of the awarding of contracts concluded with a public company of an industrial and commercial nature benefiting from the authority or influence of representatives of this company" and of "false customs declarations". The fine will not be paid given that the Italian multinational will appeal.
