Italy plans to sell stake in national post service Poste Italiane

Italy has greenlit a decree to initiate the sale of a stake in the national postal service, Poste Italiane, as part of the government's broader privatisation efforts, according to an announcement from Prime Minister Giorgia Meloni's office on Thursday.

The heavily indebted country aims to generate around 20 billion euros ($22 billion) through asset sales between 2024 and 2026 to manage its significant debt burden relative to GDP, the second-largest in the eurozone.

As outlined in the plan, the economy ministry will divest a portion of its stake in Poste while retaining public control. The Treasury currently holds a direct stake of 29.3 per cent, valued at nearly 4 billion euros at current market prices, with state investor Cassa Depositi e Prestiti (CDP) owning an additional 35 per cent.

The government, however, did not provide specific details on the chosen method for the sale, stating only an intention to "favour a widespread shareholder base and the stability of the ownership structure."

The decision on whether to proceed with a public subscription offer or through an accelerated bookbuilding procedure is yet to be finalised, according to a government official.

Italy's history of missing privatisation targets has raised skepticism, with annual proceeds from public asset sales typically falling below 0.1 per cent of GDP, according to central bank data.

Privatisation has gained renewed significance in Italy as the expansionary fiscal policy triggered by the COVID-19 pandemic in 2020 is set to conclude next year. Stricter budget rules under the reform of the EU's Stability and Growth Pact will also come into effect.

Poste Italiane, valued at 8.8 billion euros during its 2015 IPO, where Italy raised 3.1 billion euros by selling a 35 per cent stake, has since seen its market value rise to 13.5 billion euros. The group, evolving beyond its core postal services, will unveil its new industrial plan in March. Analysts highlight Poste's consistent dividend flow but express concerns about potential political interference due to the government's controlling stake.

The company has faced challenges, including becoming a significant victim of fraud related to tax incentives for building renovations and energy efficiency improvements in 2020-2021. Poste, lacking audits on assets, set aside 320 million euros to cover potential losses as prosecutors froze credits linked to fake invoices, hindering state reimbursement of tax credits.

(With Reuters inputs)