Italy’s cash-strapped Saipem to set aside $218 mln for Algeria fine

MILAN, Feb 15 (Reuters) – Cash-strapped Italian energy services group Saipem said on Tuesday it had set aside 192 million euros ($218 million) to cover a fine imposed by an Algerian court over alleged corruption which it said it would appeal.

Saipem SPMI.MI, which shocked investors last month when it said that a “significant deterioration” in margins will shave a billion euros off its core earnings, added it was not yet aware of the reasons for the court ruling.

The payment was suspended in the meantime, said Saipem, which is controlled by energy group Eni ENI.MI and Italian state lender Cassa Depositi e Prestiti (CDP).

The case revolves around the 2008 tender for the award of the GNL3 Arzew contract by state-owned Sonatrach to build a single-train gas liquefaction plant.

The ruling comes as Saipem is discussing a funding package with shareholders and creditor banks to revive its fortunes. The group, with a market valuation of some 1 billion euros, expects net debt at the end of 2021 to be around 1.5 billion euros.

‘MORE COMPLEX’

Saipem said on Tuesday that it would submit an updated strategic plan for approval by the board on March 15 and present it to investors in a conference call the following day.

The plan, originally presented last October but pulled with the profit warning, had been expected on Feb. 24.

“The problems are much more complex than was first thought,” a source close to the matter said.

Earlier in February Saipem bowed to pressure and appointed two new managers to represent its top two shareholders and flank company CEO Francesco Caio and CFO Antonio Paccioretti.

Saipem said it would present guidelines for the review of the 2022-25 plan on Feb. 24 with some financial results.