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Libya holds talks to invest in several Italian firms
Libya is in talks to invest in five or six Italian companies, with some of those deals "more important" than its recent purchase of a nearly five per cent stake in UniCredit, Libya's ambassador to Italy said.
- Reuters
- Published: 23:27 November 22, 2008
Rome: Libya is in talks to invest in five or six Italian companies, with some of those deals "more important" than its recent purchase of a nearly five per cent stake in UniCredit, Libya's ambassador to Italy said.
Ambassador Hafed Gaddur declined to name the companies involved in the ongoing talks, but said they involved both private and public companies.
"We are in talks on new opportunities that are very important," Gaddur said in an interview at the Libyan embassy in Rome. "I believe they will conclude soon."
But Libya will only invest in healthy companies without debt problems, he said, implying it was no longer eyeing a stake in Telecom Italia, which is burdened by 37 billion euros (Dh170 billion) of debt.
Gaddur declined to comment specifically on Telecom Italia, whose shares had been boosted by expectations that Libya could enter as a new investor.
"We are always looking to start new initiatives [with companies] that are healthy," he said. "If they have problems with debt, then we won't enter. The companies have to have a project that convinces us."
Shares of Telecom Italia extended their losses after the comments, falling as much as 9.4 per cent before closing down 3.8 per cent on Friday.
As sovereign wealth funds from around the world make headlines for propping up Western companies, Libya has emerged as a leading source of capital for Italian companies in addition to being an important energy partner.
Libya has no plans at the moment to increase its stake in UniCredit beyond five per cent, Gaddur said. He sought to quell speculation related to UniCredit CEO Alessandro Profumo, saying Libya did not have a position in favour of or against the CEO. He said Profumo was a "good CEO", though any decisions related to him were the board's concern, and not Libya's.
Denying a news report last week that Libya had decided to suspend investments in Italy, he said Libya is still actively seeking opportunities, especially after Italy in August agreed to pay $5 billion in compensation for colonial misdeeds.
Gaddur said the determining factor for investment was not grabbing control of the company, but whether the prospective investment stood to generate profits over the long term.
"We want to invest in Italy. Certainly, what counts is that in the end there are profits," he said. "We won't invest in just any project, there must be an [avenue] of profits behind the investment."
Focus
Libya, which can invest in Italy through its $65 billion (Dh239.07 billion) sovereign wealth fund or other entities, is focused on acquiring financial stakes, he said.
Like other sovereign wealth funds that are bargain hunting amid market turmoil, Gaddur said Libya was especially interested in companies whose share prices had been battered by financial turbulence, but whose profits and future plans remained stable.
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