UPDATE: Enel Green Unit Sees At Least 30% Dividend Payout-Source

Enel SpA's (ENEL.MI) renewables unit expects a dividend payout ratio of at least 30%--at the top of the sector range--as it aims to attract investors to Europe's biggest initial public sale in 2010, a person familiar with the matter said Wednesday.

Potential investors "appear to be very confident in the base valuation" of EUR10.5 billion for Enel Green Power SpA, said the person, who asked not to be identified.

Enel and the bankers advising it in the sale value the renewables unit at EUR10.5 billion in the pre-marketing phase, another person told Dow Jones Newswires last week.

Enel expects to start the IPO on Monday, conditional on receiving the approval of Italian securities regulator Consob this week. It hopes to raise at least EUR3 billion, which would make it the biggest European IPO in the renewables sector since 2007.

Banks advising Enel on the sale of the minority stake have met more than 300 potential investors in the pre-marketing phase and the feedback received has been positive, said the person.

An Enel press officer declined to comment.

Among potential institutional investors, the Enel Green Power IPO is aimed at those specializing in utility stocks and renewable energy ones, said the person. He added it is also targeted at long-term investors, such as pension and mutual funds.

The Rome-based utility is also selling shares to retail investors.

Enel plans to list its shares on the Milan and Madrid Bourses. Shares are expected to start trading at the start of November.

Enel Green Power has an installed capacity of about 5,700 megawatts and has set aside EUR5.1 billion through 2014 to add a further 3,500MW in the period.

The renewables company is profitable and self sufficient for funding, the company has said. Net profit at the end of June was EUR253 million.

The Enel Green Power sale is part of Enel's efforts to slash net debt to EUR45 billion by the end of December from the EUR50.87 billion of the end of 2009.

The IPO global coordinators are Mediobanca SpA (MB.MI), Intesa Sanpaolo SpA (ISP.MI), Credit Suisse Group (CS) and Goldman Sachs Group Inc. (GS).

Book runners are UniCredit SpA (UCG.MI), J.P. Morgan Chase & Co. (JPM), Morgan Stanley (MS), Barclays PLC (BCS), Bank of America Corp.'s (BAC) Merrill Lynch and Banco Bilbao Vizcaya Argentaria SA (BBVA).

-By Liam Moloney, Dow Jones Newswires; +39 06 6976 6924; liam.moloney@dowjones.com

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