Italy may sell Fincantieri shares

The Italian government is considering selling shares in Fincantieri, the country’s largest shipbuilder, which may raise about 750 million euros ($951 million) as Prime Minister Romano Prodi divests government assets to cut debt.

The Prodi government may sell about half of Fincantieri in the first six months of 2007 in a transaction that could value the company at as much as 1.5 billion euros. “The timing is favourable for a sale since market sentiment is more positive than a few months ago,” said Stefano Perotto, who helps manage about $150 million at Nuovi Investimenti in Biella, Italy.

Italy owns 98% of Fincantieri, and proceeds from the sale would cut borrowings by the government whose debt is the third biggest behind Japan and the U.S. The nation’s credit ratings were lowered by Standard & Poor’s and Fitch Ratings on19 October because of concern that Prodi’s plan to reduce government borrowing and the budget deficit doesn’t go far enough.