That Enel intends to reduce its stake in the Spanish subsidiary Endesa (as reported by the Spanish newspaper ABC) from the current 92% to a lower stake is possible as well as plausible.
In fact, to control Endesa and consolidate it in Enel's financial statements, it is sufficient to hold a 50% stake. Raising cash to reinvest elsewhere is therefore lawful, as well as strategically valid. But where? The ABC newspaper says that the Renzi government would have indicated Africa and Latin America. Even if it is precisely Latin America, the area where Endesa and Enel already have a large portion of their interests today.
So? Most likely, the sale of a part of Endesa could serve to promote investments in renewal of plants in Spain or in R&D as regards renewables, or in gas (Endesa acted as a go-between for the import of US gas), or in new emerging countries or, finally, looking for new equity investments.
The story of Endesa has certainly been troubled from the start. In fact, Enel, which wanted to embark on the path of internationalization, had originally set its sights on Gaz de France. But after the decisive no in Paris, CEO Fulvio Conti had withdrawn to Endesa. By engaging in a no-holds-barred fight with the Germans of Eon and having the Spanish Entrecanales as allies.
A game, the Spanish one, which in the end proved costly from a financial point of view, but which from a strategic point of view was all in all positive. Not without some adjustments in progress, such as what could be expected in the coming weeks. Especially after the exit of Fulvio Conti from Enel's orbit, a couple of months ago, and the consolidation of the government led by Matteo Renzi.
