STOCKS NEWS EUROPE-Ansaldo STS boosted by Peru contract prospect

Mon Mar 24, 2014 7:06am EDT
 
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Shares in Ansaldo STS rise 3.6 percent to the top of Italy's mid-cap index as a consortium including the rail signalling and transportation group emerges as the sole bidder for a contract in Peru.

The consortium, formed by builders from Peru, Italy and Spain, has bid for the construction of a $6.6 billion train line in Lima, Peru's state investment agency Proinversion said late on Friday.

"The Metro Lima contract could weigh as much as 28-34 percent of the new order intake target set by STS for 2014," Banca Akros says in a note.

It adds that the value of the deal pertaining to Ansaldo STS could be worth around 480 million euros ($661.6 million).

The consortium is made up of Peruvian company Cosapi; Italian companies Salini Impregilo, Ansaldo STS , and Ansaldo Breda; and Spanish builders Iridium Concesiones de Infraestructura and Vialia Sociedad Gestora de Concesiones de Infraestructura.

Ansaldo STS and loss-making train maker Ansaldo Breda are two units defence and industrial group Finmeccanica is planning to sell to cut debt.

"The (Peru) news is clearly positive for STS as well as for (Ansaldo) Breda; we believe that a similar contract might even accelerate the STS/Breda stake disposal from the side of Finmeccanica," Akros adds.

It estimates the rolling stock component pertaining to Ansaldo Breda could be worth another 240 million euros ($330.78 million).

Media reports over the weekend reiterated that U.S. industrial giant General Electric, Japan's Hitachi , France's Thales and Canada-based Bombardier were interested in the assets. A trader says this gave additional support to the stock.

Reuters messaging rm://elisa.anzolin.thomsonreuters.com@reuters.net

rm://agnieszka.flak.thomsonreuters.com@reuters.net ($1 = 0.7256 Euros) ($1 = 0.7256 Euros)