Subsequent events

Issue of hybrid financial instruments

On January 8, 2014, Enel launched a multi-tranche issue of non-convertible bonds for institutional investors on the international market in the form of subordinated hybrid instruments with an average maturity of about 61 years, denominated in euros and pounds sterling, in the total amount of about €1.6 billion. The issue was carried out in execution of the resolution of the Board of Directors of Enel of May 7, 2013.

The issue forms part of the measures to strengthen the financial structure of the Enel Group set out in the business plan presented to the financial community on March 13, 2013.

The transaction is structured in the following two tranches:

  • €1,000 million maturing on January 15, 2075, issued at a price of 99.368 with an annual fixed coupon of 5% until the first early redemption date set for January 15, 2020. As from that date and until maturity, the rate will be equal to the 5-year euro swap rate plus a spread of 364.8 basis points and interest step-ups of 25 basis points from January 15, 2025 and a further 75 basis points from January 15, 2040;
  • £500 million maturing on September 15, 2076, issued at a price of 99.317 with an annual fixed coupon of 6.625% (swapped into euros at a rate of about 5.60%) until the first early redemption date set for September 15, 2021. As from that date and until maturity, the rate will be equal to the 5-year GBP swap rate plus a spread of 4 08.9 basis points and interest rate s tep-ups of 25 basis points from September 15, 2026 and an additional 75 basis points from September 15, 2041.

The offering was led by a syndicate of banks comprising, for the euro tranche: Banca Imi, Banco Bilbao Vizcaya Argentaria SA, BNP Paribas, Crédit Agricole-CIB, Deutsche Bank, ING, JP Morgan, Mediobanca, Natixis, Société Générale Corporate & Investment Banking, and UniCredit Bank, and, for the sterling tranche: Barclays, BNP Paribas, Deutsche Bank, HSBC, JP Morgan, The Royal Bank of Scotland, Santander Global Banking & Markets and UBS Investment Bank.

Agreement for development of geothermal power and smart grids in Mexico

On January 13, 2014, Enel and the Instituto de Investigaciones Eléctricas, the Mexican electricity research body, signed an agreement for cooperation in geothermal generation and smart grids. With the agreement, the two parties will cooperate to exchange information and experience in smart grids and geothermal generation by means of pilot projects, training programmes and technology transfers in the respective areas of interest.

The Mexican government is seeking to implement smart grid projects in the country to improve efficiency and service quality. Another goal is diversification in power generation, a key strengthening the security of supply by increasing the contribution of renewables to the country’s energy mix.

Acquisition of an additional 15.13% of Coelce

As part of the reorganization of equity investments in Latin America following the Enersis capital increase in 2013, on January 14, 2014, Enersis, the Chilean subsidiary of the Enel Group, launched a friendly tender offer for about 42% of Companhia Energética do Ceará (Coelce), which operates in the electricity distribution sector in Brazil, of which it already indirectly holds about 58%. After the conclusion of the offering period, on February 17, 2014, Enersis acquired 15.13% of Coelce on Brazil’s Bovespa exchange, for about $242 million (€176 million). For ordinary shares, in accordance with Brazilian law, the offer will remain open for a further 90 days in order to give shareholders who did not take up the offer in the previous 33 days the time they need to decide

Price adjustment in disposal of Artic Russia

On January 15, 2014, Eni announced the sale of its 60% stake in Artic Russia, held through Eni International, to the Russian company Yamal Development. Considering the agreements signed by Itera and the Enel Group prior to the completion of the sale of Enel’s 40% stake in Artic Russia, the Group asked Itera to adjust the price of Artic Russia by around $112 million.