Finmeccanica is devising a plan to shed non-core activities worth a further €2.3 billion ($1.86 billion) as it streamlines its activities to aerospace and defence.
Finmeccanica has been on a spending spree over the past five years, acquiring stakes in aerospace and defence companies including Aermacchi, FiatAvio, Marconi Selenia Communications and its recent acquisition of GKN's stake in AgustaWestland for a price that could top €1.5 billion.
The Italian company has also merged its satellite and space systems businesses with those of Alcatel into the Eurosystems joint venture.
Finmeccanica chief executive Roberto Testore says the company is embarking on an ambitious strategy of global consolidation in an attempt to grow its aerospace, defence and security revenues from €6.2 billion last year to €10 billion by 2006.
"These big negotiations are all aligned with our strategic direction, and are intended to focus us on the sectors of our main strengths internationally," he says.
Finmeccanica, in which the Italian government now only owns a one-third stake, had an "insignificant" debt to equity ratio of around 8% prior to its acquisition drive, says Testore, and the aim is not to increase that ratio above 40%.
Investment over the past two years has totalled around €2.7 billion and to maintain this goal, the company is to sell further non-core assets, he adds.
Finmeccanica sold of 17.2% of its shares in chip manufacturer ST Microelectronics earlier this year, netting it around €2.6 billion, but further disposals are necessary. says Testore.
Finmeccanica is now finalising plans to dispose of its Ansaldo rail, energy and information technology investments with an estimated combined value of around €2.3 billion. Testore says there are "several options being discussed" by Finmeccanica and the Italian government over the future of Ansaldo.
"There could be a creation of a civil Finmeccanica, where these companies sit under a government umbrella, or we could agree to stay on as a minority shareholder, of there could be full privatisation," he says. There is no timetable for a final decision, although it will be the board, rather than the government which decides, he adds.
Testore says Finmeccanica's future will be linked to entry into the most strategic new international aircraft developments rather than attempting to develop its own programmes.
JUSTIN WASTNAGE
Source: Flight Daily News
