2016-2019 Strategy: Building a stronger Saipem Capital increase, debt refinancing and new strategic objectives

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London, 27 October, 2015.  The Board of Directors of Saipem S.p.A, chaired by Paolo Andrea Colombo, today approved the company’s new strategic plan, involving a share capital increase, extraordinary debt refinancing and updated four-year business plan. The Board also resolved to convene an Extraordinary Shareholders’ Meeting for 2 December 2015, to approve the share capital increase.  
A stronger balance sheet
o Rights issue of up to €3,500 million, expected to be completed in Q1 2016;
o Irrevocable commitment from Eni to exercise its rights (today equivalent to around 43% of total capital increase); subject to completion of the acquisition of 12.5% of Saipem share capital from Eni, Fondo Strategico Italiano (“FSI”) to irrevocably commit to exercise its rights;  
o Pre-underwriting commitment by a syndicate of global banks to subscribe unexercised rights, if any, at conditions in line with market practice;  
o Transaction aimed at reducing net leverage from expected 4.6x at 2015 Year-End to 1.7x on a pro forma basis;  
o Remaining €3,200 million gross debt at closing to be refinanced by new credit lines fully committed by banking syndicate.
o Expected provisional public rating: investment grade

A leaner business, focused on Saipem’s core strengths:  
o “Fit for the future” cost cutting target increased from €1,300m announced in July to €1,500m (201517 cumulated);
o Focus on core business, with identified disposal opportunities;  
o EBIT margin expected to increase from around 5.5% in 2016 to >7.5% over the plan period.

De-risking across segments:  
o In-depth review of risk management and commercial processes;
o Business mix to re-focus on higher value-added/lower-risk activities.

Disciplined financial  policy:  
o Capex < €600 million per annum 2016 and 2017;
o Working capital management: positive contribution to cash flow from 2016;
o Net debt  <€1,500 million in 2016; <€1,000 million by 2017;
o Strong commitment to investment grade credit rating. 

Stefano Cao, Saipem CEO, commented: 
“Today’s announcement marks a turning point for Saipem: we have a new shareholder structure, a strengthened balance sheet a new strategic plan.  
The capital raise of up to €3.5 billion, strongly supported by Eni and Fondo Strategico Italiano, will bring our net debt back in line with our peers, at a level which I believe will secure an investment grade credit rating and therefore obtaining a competitive rate for the refinancing of €3.2 billion of outstanding debt. This provides a strong financial platform on which to build Saipem’s future.  
Saipem has a number of distinctive advantages: long-term client relationships, exposure to defensive markets and expertise in delivering large-scale, complex projects - both offshore and onshore.  
We have acted quickly and incisively to downsize the cost base as required by the new oil-price scenario. Over the past few months we have launched a series of initiatives to rationalise  our activities, increasing our cost savings target to €1.5bn by 2017.  
The new visual identity and logo are a symbol of the profound transformation the group is undertaking with this new strategic plan. 
With a strong balance sheet, a leaner operating structure and its distinctive business model Saipem is well positioned to improve profitability, deliver cash generation and shareholder value.”


Saipem operates in the Engineering & Construction and Drilling businesses, with a strong bias towards oil & gas-related activities in remote areas and deep-waters. Saipem is a leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and execution of large-scale offshore and onshore projects, and technological competences such as gas monetization and heavy oil exploitation.

Website: www.saipem.com
Switchboard: +39 0244231 

Media relations
Tel: +39 0244234088;
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iCorporate press office
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Relations with institutional investors and financial analysts
Tel: +39 0244234653; Fax: +39 0244254295;
E-mail: investor.relations@saipem.com 

Contact point for retail investors  
E-mail: segreteria.societaria@saipem.com

2016-2019 Strategy: Building a stronger Saipem Capital increase, debt refinancing and new strategic objectives

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