Italy plans state rail IPO in $21bn privatisation push

Asset sales could help Rome assuage investor concerns about the country's mammoth debt

Italian Prime Minister Giorgia Meloni's government is focusing on increasing its revenues through privatisation of state-owned companies. EPA

Italy’s government is working on a plan to sell a minority stake in state rail company Ferrovie dello Stato, in its latest move to unload assets to help shore up public finances, sources said.

The initial public offering, one of the largest in Italy’s recent history, would involve about one-third of the company and be a crucial part of Italy’s €20 billion ($21.2 billion) privatisation plan announced last month by Giorgia Meloni’s government, the sources said.

It is unclear whether the network company owned by Ferrovie, Rfi, would remain out of the perimeter of the deal, they added.

Daily La Stampa reported on Wednesday that a sale could be valued at up to €5 billion.

The Finance Ministry said there is no official plan on the matter at this time. Ferrovie dello Stato declined to comment.

Finance Minister Giancarlo Giorgetti told MPs in Rome on Tuesday that Ms Meloni’s right-wing government plans to pursue the partial privatisation of some state-controlled companies, noting that infrastructure-related groups could be candidates.

Even if Rome backs the sale, kicking it off could require several months as Italy introduces regulatory changes to assess a tariff scheme for railway operators and introduces a revenue asset base framework for the railway network.

The process would be led by chief executive Luigi Ferraris, who took over the company in 2021, and formerly worked on the IPO of Enel Green Power.

Asset sales could help Rome assuage European Union and investor concerns about Italy’s mammoth debt and high deficit. The government is already counting on inflow from the coming sale of lender Banca Monte dei Paschi di Siena, while it is also pulling off a deal to sell a stake in carrier ITA to Deutsche Lufthansa, helping to dispose of a liability that has soaked up billions of euros in state support.

Italy last month presented a budget update that shows the government plans to bring its deficit below the limit set by the EU only in 2026 – a year later than previously planned.

A €20 billion cash-inflow from privatisations over three years was presented as part of the plan.