Libya fund eyes stakes in Italian banks
Source: BI-ME and Reuters , Author: BI-ME staff
Posted: Sun February 15, 2009 12:00 am

LIBYA. Libya's sovereign wealth fund could acquire stakes in Italian banks, the fund's chairman was quoted saying in an Italian newspaper on Saturday, without specifying which banks or when any acquisitions might take place.

Libyan Investment Authority Chairman Abdulhafid Zlitni also said that although talks on acquiring a stake in Telecom Italia had ended without agreement, Libya could be willing to restart negotiations in the future.

"We had talks. The positions remained distant. But we're open to restarting negotiations," Zlitni was quoted saying in an interview with Corriere della Sera newspaper.

The Libyan Investment Authority is one of several highly secretive investment funds owned by national governments that have become increasingly active in buying up Western assets, flush with cash from high oil prices in previous years.

Libya's central bank already bought a 4.6% stake in UniCredit, Italy's second-biggest bank. It came to UniCredit's rescue earlier this week by helping plug a shortfall in its capital raising efforts.

"We have signalled our willingness to buy stakes in other banks," Zlitni was quoted as saying.

"In this period, the banks are suffering from the problems we all know about, and therefore we're studying them with care. And it could be that in this framework there is also the desire of Italian banks for our collaboration," he added.

Asked by Corriere what kind of liquidity Libya had available for investments globally, Zlitni said: "We have a very high liquidity, availability for US$80 billion."

Corriere said Zlitni estimated that investments in Italy could eventually total at least 10% of that amount.

Zlitni confirmed that Libya still wanted to hike its stake in oil company Eni, which the Italian government recently estimated at about 2%.

"We intend to increase our stake, by how much depends on the price and the circumstances. The important thing is that the group enters with us in common projects, not just in Libya but in Italy and the rest of the world," he said.

Zlitni, who is also Libya's Planning Minister, announced on Thursday that Libya would set up a joint fund of as much as US$500 million with Italian bank Mediobanca to invest in Italian companies.

He told reporters then that the sovereign wealth fund controlled assets of more than US$65 billion but had only up to 23% of its available cash funnelled into investments.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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