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Italy's Leonardo to raise about 2.1 billion euros in DRS U.S. listing: paper

Kitco News

ROME (Reuters) - Italian defence group Leonardo is set to raise about 2.1 billion euros ($2.54 billion) from the New York Stock Exchange listing of its U.S. unit DRS, daily Il Messaggero reported on Friday.

The newspaper said state-controlled Leonardo would hold a board meeting next week to decide on the initial public offering (IPO), which is expected to be completed by March.

At the request of Italy’s market watchdog Consob, the group issued a statement saying it was evaluating the possibility of listing DRS.

It added that no formal decision on the matter had been taken yet, confirming what a source had told Reuters.

The move is intended to support the defence conglomerate’s strategy and raise fresh liquidity and is expected to consist of a sale of 40% of Leonardo’s stake as well as a cash call, the report added.

In November, Leonardo said it intended to keep control of the unit as it assessed various options for the U.S. subsidiary, including a NYSE listing.

Leonardo bought DRS in 2008 in a deal valuing the U.S. defence company at $5.2 billion, including $1.27 billion in debt, equal to 3.4 billion euros at the time of the acquisition, according to Leonardo’s presentation of the 2008 deal.

Il Messaggero said DRS was given a total value close to 3.5 billion euros.

Shares in the defence conglomerate were among the top three best performers in Italy’s blue chip index, posting a 10% gain on the day.

($1 = 0.8268 euro)

Reporting by Stefano Bernabei and Francesca Landini; writing by Giulia Segreti; editing by Subhranshu Sahu, David Evans and Jonathan Oatis

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