Italy's Government Announces $21 Billion Privatization Drive, Including State Rail IPO

16 Oct, 2023

Italy's Government Announces $21 Billion Privatization Drive, Including State Rail IPO

The Italian government is working on a strategy to sell a minority stake in state-owned rail company Ferrovie dello Stato, marking a significant step in their €20 billion ($21.2 billion) privatization initiative announced by the current administration. This planned IPO, one of the largest in Italy's recent history, would involve approximately one-third of

the company. It is unclear whether Ferrovie's network company, Rfi, would be part of this deal.

While the Finance Ministry stated that there is no official plan on the matter at this time, Finance Minister Giancarlo Giorgetti mentioned the government's intention to partially privatize certain state-controlled companies, particularly those in the infrastructure sector.

However, initiating this sale could take several months, as Italy needs to introduce regulatory changes to assess a tariff scheme for railway operators and establish a revenue asset base framework for the railway network. The CEO of Ferrovie dello Stato, Luigi Ferraris, who previously worked on the IPO of Enel Green Power, would oversee this process.

The Italian government is exploring asset sales to address concerns from the European Union and investors regarding Italy's significant debt and high deficit. These asset sales include the forthcoming sale of lender Banca Monte dei Paschi di Siena and a deal to sell a stake in ITA to Deutsche Lufthansa, reducing liabilities that have previously required substantial state support.

In a budget update last month, Italy revealed its plan to bring its deficit below the EU-set limit only by 2026, a year later than previously planned. Part of this strategy involves raising €20 billion through privatizations over three years to bolster the country's finances.