(Reuters) -Italy's biggest utility Enel (BIT:ENEI) Spa on Thursday said it will sell its Romanian operations to Greece's Public Power Corp (PPC) for 1.26 billion euros ($1.33 billion) as part of efforts to cut debt and focus on cleaner energy.
Including debt, the deal is valued at 1.9 billion euros, Enel said in a statement, adding that the transaction would generate a positive effect on its consolidated net debt of about 1.7 billion euros.
In November Enel presented a 2023-25 strategic update saying it was planning asset sales worth 21 billion euros and aimed to lower its debt to 51-52 billion euros by the end of this year.
"With the sale of all our activities in Romania, we continue to implement the disposal plan,” CEO Francesco Starace said.
Enel's deal with PPC is expected to close by the third quarter.
PPC, which called the deal "a transformational event for its growth strategy", said that it plans to finance the acquisition with a 485 million euro 5-year term loan through Greek banks and a 315 million euro bridge facility through international banks.
"This is a unique chance to acquire an integrated utility platform at an attractive valuation, setting PPC on the path to becoming a leading Clean Utility player in the South-East Europe area," PPC chairman and CEO Geogios Stassis said.
"We are confident that this significant development will drive growth and improve PPC’s competitiveness on both an international and domestic level."
($1 = 0.9485 euros)