Italy government

Exclusive: Italian government set to reappoint CEOs of Eni and Enel – source

ROME (Reuters) – The CEOs of Italy’s two main energy groups Eni ENI.MI and Enel ENEI.MI are on track for a third term next week when Rome decides roles in major state-controlled companies, a senior government official has said.

FILE PHOTO: Claudio Descalzi, CEO of Italian energy company Eni, talks to the media at the presidential palace in Nicosia, Cyprus April 25, 2018. REUTERS/Yiannis Kourtoglou

Claudio Descalzi and Francesco Starace took charge of Eni and Enel, respectively, in 2014 and were both reappointed in 2017.

The boards of the two companies are due for renewal in May, as well as those of the defense group Leonardo LDOF.MI, Terna power grid TRN.MI and bank Monte dei Paschi di Siena BMPS.MI.

But the government is expected to draw up its list of board candidates – including CEOs – by April 18, the source said, asking not to be named due to the sensitivity of the topic.

The nominations were originally expected in March but were delayed due to the coronavirus crisis, which is expected to push the euro zone’s third-largest economy into its worst recession in modern history.

“There were intense political talks between the ruling parties, but ultimately the reappointment of Descalzi and Starace can be seen as almost a done deal,” the source said.

The Economy Ministry declined to comment for this story. Eni and Enel also declined to comment.

Under Descalzi, Eni became one of Europe’s most successful oil and gas explorers.

However, Italy’s main ruling party, the 5 Star Anti-Establishment Movement, has in the past been highly critical of Descalzi over his involvement in a trial in Italy for alleged corruption in connection with a 2011 oil deal in Nigeria.

The veteran tanker denied any wrongdoing.

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Political sources had previously told Reuters that Rome was leaning towards renewing Descalzi.

A 5-star source, also asking not to be named, said his party was urging his coalition partners not to reappoint Starace to Enel, but the government official said the nomination would go ahead thanks to Starace’s powerful supporters, including Economy Minister Roberto Gualtieri.

Some key 5-Star members have accused Starace of dragging their feet on a party-backed plan to merge Telecom Italia TLIT.MI fib broadband assets with those of Open Fiber, controlled by Enel ENEI.MI and the state lender CDP.

The party has placed the creation of a single ultra-fast broadband network at the center of its program in order to bridge the digital divide with the rest of Europe.

“They’re making a lot of noise but they’re not really in a position to seriously challenge Starace’s reappointment,” the government official said.

However, the appointment process in Italian state-controlled companies is traditionally subject to long haggling, and the results can be unpredictable and change suddenly depending on political vagaries.

Since taking over the helm of Enel in 2014, Starace, 65, has been applauded by investors for his financial results and the transformation of the former electricity monopoly into one of the utilities largest and cleanest in the world.

If reappointed, Descalzi and Starace would both serve three-year terms.

The 5 Star Movement is also campaigning to replace Terna CEO Luigi Ferraris with Acea utility chief Stefano Antonio Donnarumma. ACE.MI, said the party source.

A third source with knowledge of the matter told Reuters that Ferraris could be named head of railway group Ferrovie dello Stato.

Terna declined to comment.

Additional reporting by Stephen Jewkes in Milan Editing by Giselda Vagnoni/Gavin Jones/Susan Fenton