Enel says renewables unit worth 12-14 times EBITDA

By Giuseppe Fonte

FROSOLONE, Italy, March 28 (Reuters) - Italy's biggest utility Enel (ENEI.MI: Quote, Profile, Research) values its new renewable energy arm at up to 14 times core earnings, its chief executive said on Friday.

Enel said this month it would form the unit from existing assets in coming months and would consider selling a minority stake in it, a move aimed at cutting its debt.

"We are talking several billion euros," Chief Executive Fulvio Conti told a news conference when asked about the new unit's value.

"If we look at analysts' evaluations, fossil fuel power generation is valued at 7-8 times margins. With renewable energy we are talking about 12-14 times EBITDA (earnings before interest, tax, depreciation and amortisation), or sometimes even 20 times EBITDA," Conti said.

With Enel's renewable energy EBITDA expected to grow to about 1 billion euros ($1.58 billion) by 2012, the new unit may be worth 14 billion euros.

Conti, speaking at a presentation of Enel's upgraded wind farm in Frosolone, southern Italy, said he did not exclude a bourse listing for the renewable energy division but that such a move would be unlikely this year.

Britain's BP Plc (BP.L: Quote, Profile, Research) this year also said it might float or sell parts of its alternative energy unit.

Conti confirmed Enel plans to sell 19,000km of high voltage network by the end of 2008, part of its debt-cutting efforts.

(Writing by Svetlana Kovalyova; Editing by David Hulmes)