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       CNE100000JN9

CHINA CNR CORP LTD

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Japan's Hitachi closes in on Finmeccanica rail assets

11/18/2014 | 10:42am EDT
A shopper rides an escalator past a logo of Hitachi Corp at an electronics retail store in Tokyo

MILAN (Reuters) - Italian industrial conglomerate Finmeccanica (>> Finmeccanica SpA) said on Tuesday Japan's Hitachi (>> Hitachi, Ltd.) had submitted an offer to buy rail assets it has put on the block as part of plans to cut debt.

MILAN (Reuters) - Italian industrial conglomerate Finmeccanica (>> Finmeccanica SpA) said on Tuesday Japan's Hitachi (>> Hitachi, Ltd.) had submitted an offer to buy rail assets it has put on the block as part of plans to cut debt.

Finmeccanica had shortlisted Hitachi and China's CNR Corporation (>> China CNR Corp Ltd) to buy both loss-making train maker AnsaldoBreda and its coveted 40 percent stake in rail signalling group Ansaldo STS (>> Ansaldo STS SpA). Bids were due by Nov. 17.

Italy's biggest defence group, which made no mention of CNR in its statement, said it would look at Hitachi's offer with a view to closing a deal by the end of the year.

No financial details were given but earlier this week Japanese news agency Nikkei said Hitachi was likely to offer around $1.7 billion (1 billion pounds) for the assets.

The sale of AnsaldoBreda and Ansaldo STS is part of a plan to turn around heavily indebted Finmeccanica and focus on its aerospace and defence businesses.

"Hitachi is interested in the whole 40 percent stake in Ansaldo STS which is currently worth around $850 million," a source close to the matter said, adding some of the proceeds from the sale could be used by Finmeccanica to put AnsaldoBreda on a firmer financial footing.

But another source with direct knowledge of the situation said Hitachi was "millions of light years away" from defining a deal structure for Ansaldo STS.

At 1530 GMT, Finmeccanica shares were down 0.1 percent at 7.475 euros, while Ansaldo STS stock was up 0.9 percent at 8.515 euros.

Since the appointment of former state railway chief Mauro Moretti as CEO in June, Finmeccanica has approved a plan to streamline its businesses and stepped up disposals.

It is committed to selling its construction and engineering unit FATA and is mulling options for its U.S. military electronics maker DRS Technologies for which it paid $4 billion in 2008.

The group, whose credit ratings have been downgraded to "junk", will present a new business plan at the end of January.

Last month, Standard & Poor's cut its credit rating outlook to negative on weak profit prospects but said it could upgrade it back to stable if the group cashed in from its restructuring and asset disposal plan.

Finmeccanica lifted its full-year targets earlier this month after its nine-month net loss narrowed.

(Additional reporting by Pamela Barbaglia; Editing by Danilo Masoni and Mark Potter)

By Stephen Jewkes


© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
ANSALDO STS 0.00%End-of-day quote.-0.16%
HITACHI, LTD. -4.02% 6303 Delayed Quote.5.41%
LEONARDO S.P.A. 1.04% 7.754 Delayed Quote.21.75%
NIKKEI 225 -2.66% 26431.55 Real-time Quote.-5.69%
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