First, let’s take a look at the transaction with Cassa Deposito e Prestiti. As some of you may remember, we set out the criteria by which we would evaluate the disposal of SNAM in our strategy presentation on last March. These criteria were; first, the transaction should be positive for Eni shareholders. Second, the transaction should protect SNAM shareholders by limiting the overhang on SNAM shares.And third, lastly, the disposal should strengthen Eni’S balance sheet in view of its very attractive organic growth opportunities. We believe the disposal meets all three criterias. First, it is positive for Eni shareholders. Cassa Deposito e Prestiti is paying €3.47 a share for the controlling 30% stake, a 3% premium to trading prices in the 30 days before the issue of the BPCM last Friday and a 5% premium to SNAM’s 2011 regulated asset base. Second, we protect SNAM’s shareholders from an excessive overhang. More than half of our stake would be sold to a stable long-term holder and there is no time limit on the sale of our residual shares, which means we have the flexibility to maximize value creation while minimizing market disruption. Thirdly, at the end of the process, Eni will have cashed in something in excess of €6 billion and that consolidated over €11 billion of debt. There is no doubt that the new Eni will be a stronger company than it is today. Sandro will now take you through what it will look like. Alessandro Bernini Thank you, Paolo. To give you an idea of the impact of the disposal of SNAM on the Eni, I will take you through what we would have looked like in 2011, if the transaction had already taken place. Looking at our balance sheet, first, we ended 2011 with net debt of €28 billion and the shareholders’ equity of around €60 billion. If you factor in the sale of our entire stake in SNAM, so the consolidation of over €11 billion of debt €3.5 billion of cashing from the CDP transaction, and €2.8 billion of cashing from the sale of the remaining stake at current market values.
Eni net debt felled from €28 billion to less than €11 billion. At the same time the disposal would have a positive impact on our shareholders’ equity, which would rise from €60 billion to over €62 billion. Overall, the disposal of SNAM would therefore improve leverage from 0.46 at year-end 2011 to less than 0.20 on a pro forma basis.Looking at our profit and cash flows the consolidation of SNAM from the full year 2011 would reduce our EBITDA by 12%. However, the impact on free cash flow would be negligible as SNAM invest roughly the whole of the cash generated by its operations. In strategic terms, as accounts of the disposal of SNAM, Eni would be a much upstream business than it is today. Looking at our capital employed, E&P will account for almost 60% of Eni, up from almost 50% at the end of 2011, while gas and power will [afford] from over 30% to 17%. The consolidation of SNAM will also boost Eni’s adjusted returns on average capital employed from the 2011 level of 9.9% to a pro forma of 10.4%. Ladies and gentlemen, thank you for your attention. Let me now hand you over to Paolo to wrap up. Read the rest of this transcript for free on seekingalpha.com