Enel prepares to combine Spanish renewable resources

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MADRID/MILAN (Reuters) - Italy"s Enel SpA looks set to merge most of its Spanish renewable energy assets into its Green Power unit in a move to beef up the division ahead of a stake sale scheduled for this year.

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Its 92 percent-owned Spanish unit Endesa SA said on Thursday it was talking to Enel about the benefits of merging its renewables assets with those held separately by the Italian utility, but no decision had yet been taken.

"The idea is to set up a joint venture that is majority owned by Enel and into which Endesa would place its renewable assets in Spain, while Enel would place its Eufer assets," a source close to the operation said.

"EGP would eventually take ownership of the Enel share in the joint venture, which could be around 60 percent," the source added.

Enel"s renewable energy assets in Spain are split between 2.7 gigawatts of generation capacity held through Endesa and a 50 percent stake in its 1.2 gigawatt Eufer joint venture with Gas Natural, according to Endesa and Eufer websites.

Gas Natural is studying a proposal by Enel, Europe"s most indebted utility, to break up Eufer and divide up its assets, sources close to the operation told Reuters.

Gas Natural and Enel declined comment.

Enel"s plans to save on operating costs by grouping together its Spanish renewables assets and merging most of them into Enel Green Power (EGP) makes sense ahead of the unit"s expected partial listing this year, analysts said.

"There are obvious synergies and it"s hard to see why they haven"t done it before if they want to sell the stake in EGP," UniCredit analyst Javier Suarez said, adding he has an EGP enterprise value of around 10 billion euros.

It had originally targeted the unit for sale by end-2009 but the group"s CFO Luigi Ferraris told Reuters in December: "We believe a June-September deadline is achievable and we"ve given ourselves a bit more time so we can present a complete equity story for EGP."

Enel is banking on a minority stake sale in EGP to reduce its debt pile, which at the end of 2009 was around 51 billion euros ($69.8 billion).

At 1148 GMT, Enel shares were down 0.6 percent, broadly in line with falls in the European utilities sector.

(Editing by David Holmes)

($1=.7310 Euro)

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