MILAN (AFX) - Gas Plus SpA, the Italian producer and seller of natural gas, said it plans to invest the 82 mln eur or more it raises from its initial public offering to finance growth and become a full integrated gas player.
In a road show for its IPO, the company added that its dividend policy will vary according to its investments needs, which could include acquisitions.
The company said it will offer a dividend at least 25 pct of its 2006 net profit next year, adding that in years to come, the payout ratio could be as much as 50 pct of net profit, depending on investments.
'We will offer a payout of at least 25 pct and are targeting a level of 50 pct in coming years,' Gas Plus CFO Piero Cocco-Ordini said.
The CFO said the group's positive operating performance so far this year is continuing and the favorable EBITDA trend will be confirmed at the year-end.
In the first nine months of 2006, the company's EBITDA rose 29.6 pct on the year to 38.5 mln eur. Sales in the period rose 15.7 pct to 126.3 mln eur.
In its IPO, which begins today and ends on Dec 1, Gas Plus is offering up to 11.25 mln new shares, representing 25.1 pct of the company's capital after the capital increase.
If an overallotment offer is taken up, the float will be 27.8 pct.
The price range for the IPO is 7.25-9.10 eur a share, valuing the company at between 244-306 mln eur.
The final price will be announced by Dec 5 and the stock will start trading on the Milan stock exchange's main market on Dec 6.
CEO Davide Usberti, whose family owns Gas Plus, said the company might consider switching to the Star segment of the Milan stock exchange. He said a decision will be taken within a year.
The Star segment of the Milan market is designed for medium-sized companies that are prepared to meet more stringent listing requirements. One requirement is that at least 30 pct of capital be floated.
However, this condition no longer applies if a company has been listed on another segment of the market for over a year.
Asked about ongoing consolidation in Italy's local utility sector, Usberti said his group is currently focused on becoming an integrated gas player, developing interests in upstream and downstream activity as well as storage.
'Our main aim is to be competitive but we are active players and will monitor the situation,' he said. 'We have assets and know how to play them. An eventual acquisition will be one more lever in our favor.'
Usberti said his group's 18.6 pct stake in Veneto gas distributor Serenissima Gas SpA could be a strategically important asset in the consolidation process.
Turning to investments, Usberti said a part of the proceeds from the IPO will be invested in the development of the gas storage business.
Of the company's 38 gas exploration and production concessions in Italy, two will be converted into storage facilities.
One facility at Sinarca will involve investments of 50 mln eur between 2007-2010 and will become operational in the 2009-2010 gas year. Gas Plus owns 60 pct of the facility while Edison SpA owns the remaining 40 pct.
With regard to storage, Gas Plus said it has signed a memorandum of understanding with Gazexport, the natural gas exporting division of Gazprom.
'We will store gas for Gazprom and they in return will give us capacity,' said Giulio Paini, chairman of Gas Plus's E&P division.
Gazprom recently reached a preliminary agreement with Eni SpA that will allow the Russian gas giant to distribute 3 bln cubic metres of gas per year in Italy.
The company, which has upstream gas interests via joint ventures in the UK North Sea, is also interested in developing upstream business in the Mediterranean area.
'We could be interested in upstream gas activity in North Africa,' Usberti said. stephen.jewkes@afxnews.com sj/pw/jsa COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited