Is the Treasury ramming Fincantieri on Leonardo’s Oto Melara?
What is said and rumored in the corridors of the Ministry of Economy about a possible capital increase of Fincantieri for the acquisition of Oto Melara from Leonardo
“But have we really given the green light to a possible capital increase of Fincantieri for the Oto Melara operation?”.
This is the question that circulates at the top floors of the Ministry of Economy that are followed by the subsidiaries and subsidiaries – directly or indirectly – of the State, such as Fincantieri (controlled by Cdp Industria with 71.32%).
A pleonastic question, given that the answer is implicit: no, there has been no ok of any kind to such a hypothesis, even though the group chaired by Giampaolo Massolo and led by CEO, Giuseppe Bono, has been aiming for some time to expand the spectrum of business with acquisitions.
This is not a question of top management in the balance, given that in a few months Bono expires and therefore it would be premature to give the green light to an operation strongly supported by the number one of Fincantieri who has more and more the ball – or the mania, whisper his critics, as numerous in the rooms of Roman palaces as his fans – of extending the business to the military sector tout court, like Leonardo's Oto Melara.
But the Treasury can give the green light – via Cdp – to a capital increase of Fincantieri for an operation that in fact prefigures a twist of Fincantieri's business from shipbuilding – civil and military – towards the pure military since Oto Melara and Wass they produce naval guns and torpedoes respectively: since 2016 they are both part of Leonardo's Defense Systems division . The division's turnover is approximately 550 million euros.
In particular, Oto Melara produces the most common cannon on warships all over the world: the 76/62 purchased by the fleets of 53 countries, including the French and German ones. In addition, the company has developed the “Volcano” technology which makes artillery shells very similar to missiles, with autonomous guidance in the final trajectory and an increased range.
In 1985 the La Spezia company became part of an equal consortium with Iveco, forming the current Cio Iveco-Oto Melara, leader of the land armaments industry.
And it is precisely for this reason that the German Rheinmetall also looks to the subsidiary of Leonardo, as explained in the hearing in the Defense and Productive Activities committees of the Chamber, the CEO of Rheinmetall Italia, Alessandro Ercolani, who aims at an industrial collaboration.
Rheinmetall Italia's strategy in fact concerns the creation of a new CIO, a land armaments consortium that includes 33% Rheinmetall, with the aim of participating in the programs of the new tanks (Aifv and Mgcs).
Indeed, Fincantieri's offer informally includes Rheinmetall. In the event of the award of the former Oto Melara, the shipbuilding group led by Giuseppe Bono will need a terrestrial partner and that can only be Rheinmetall since they are buying together the German Tkms which builds submarines and surface ships.
The latter move once again underlines the shift towards military business for Fincantieri. And Bono has never made any secret of pursuing the consolidation of the European defense industry, with a lion's role for the Trieste group in the naval sector.
On the other hand, the Mef's opposition, cloaked in questions, were indirectly present days ago in a few lines of an extensive article by Gianni Dragoni of the Sole 24 Ore . "CDP has not made any assessment of such an operation, which does not seem to fall within the objectives of Scannapieco's industrial plan, which emphasizes ESG investments", underlined Dragoni.
In mid-December, Reuters and Bloomberg reported that the group led by Bono enjoys the support of its largest shareholder – Cdp – for a capital increase that would allow it to bid for the sale of the former Oto Melara e Wass.
According to Bloomberg , "CDP is willing to participate in a capital increase of up to 700 million euros for Fincantieri".
Yet Il Sole 24 Ore is not so convinced.
Rather, CDP's focus would therefore be more on ESG (environmental, social and governance) investments. In the meantime, just last week Leonardo signed, with a club of national and international banks, an ESG-linked Term Loan line of credit for an amount of 600 million, with a duration of 5 years and maturing at the beginning of 2027, aimed at repaying a bond loan maturing in January 2022.
"With the signing of this credit line, 50% of Leonardo's sources of financing are ESG-linked, confirming our commitment to sustainability, an integral part of Leonardo's Industrial Plan and incentive system, and to sustainable finance "Had commented the CEO of Leonardo.
However, precisely "the ESG criteria adopted by the banks make financing to defense groups more difficult" reported Milano Finanza in an interview with Leonardo's number one . But "Defense is fundamental for safety and in turn safety is a prerequisite for sustainability", highlighted Profumo in an interview with Mf .
But the question, for Fincantieri, does not only concern the ESG criteria, the Treasury is told.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/il-tesoro-sperona-fincantieri-su-oto-melara-di-leonardo/ on Tue, 28 Dec 2021 13:48:33 +0000.