Annual Report 2006 - Enel.com

Significant events in 2006
Disposal of stake in Wind
On February 8, 2006, Enel and Weather Investments (Weather), a company controlled
by Egyptian businessman Naguib Sawiris, completed the second and final phase
of the sale of Wind. Specifically, following the exercise by Weather of the call option
provided for in the agreements of May 2005, Enel sold a stake of 6.28%
of Wind to a subsidiary of Weather for €328 million in cash. Enel also transferred
to Weather its remaining 30.97% stake in Wind in exchange for shares representing
20.9% of Weather. Taking account of the 5.2% of Weather acquired in August 2005
in the first phase of the transaction, at February 8, 2006 Enel held a total stake of
26.1% in that company.
Disposal of stake in Weather
On December 21, 2006, Enel agreed to a price of €1,962 million for its 26.1%
in Weather, which it had obtained in the Wind-Weather exchange of shares.
The agreement envisaged the sale of 10% of Weather to a wholly-owned Weather
subsidiary and the remaining 16.1% to its parent company Weather Investments
II S.à.r.l. (Weather II), a holding company controlled by Sawiris.
The first part of the price was settled with a payment of €1 billion at the time the
Weather stake was transferred, while a second payment of €962 million will be
settled within 18 months of the transfer. The second installment will earn interest
in line with market rates as from the date of the transfer. Payment of the second
installment is secured by the pledge (without voting rights) of the 26.1% of Weather
share capital in favor of Enel, and the agreement also provides for the assignment
of Weather II’s receivables due from Weather.
The accord also provides for an earn-out mechanism, which will supplement the
price due to Enel in the event Sawiris’ group should sell the Weather shares to other
investors at a price above that agreed with Enel within 18 months of the transfer.
The agreement also terminates the shareholders’ agreement between Enel and
Sawiris regarding the management of Weather.
At the end of the entire operation, Enel will have received a net cash price of €4,971
million, excluding interest on payment deferral granted to the buyer.
20 Enel Annual Report 2006 Report on operations