Sat. Apr 4th, 2020

Enel chooses Sánchez-Calero as a substitute for Borja Prado in the Presidency of Endesa | Economy

Enel chooses Sánchez-Calero as a substitute for Borja Prado in the Presidency of Endesa | Economy

The board of directors of Endesa has elected Juan Sánchez-Calero Guilarte as the new board member of the entity to subsequently replace Borja Prado in the presidency. The appointment has to be ratified by the general meeting of shareholders next April 12. The procedure will not generate any problem since 70% of the capital is held by the Italian group Enel, which is the one that makes the proposal.

Juan Sánchez Calero is a professor of Mechantil Law at the Complutense University of Madrid since 1997 and a member of the legal firm that bears his name. He has been repeatedly elected to be part of the Board of the Faculty of Law and the Faculty of the Complutense University. He has been director of the Banking and Securities Law Magazine since 2009. He also participates in Management Boards, Editorial Board or scientists of the main Spanish publications in commercial matters. The new president will not have executive functions, which will go to José Bogas, who will continue as CEO of the power company.

Borja Prado will serve on the board for 10 years as president, to which we must add two of our directors previously. It was named in replacement of José Manuel Entrecanales after the divorce between Enel and Acciona that supposed the takeover of the Italian company. Prado was a man of confidence of the Italian group that knew him for being the representative of Mediobanca in Spain. In its first years its work focused on intermediating between the Government and the company and straightening the results. He maintained a very close and fluid relationship with Fulvio Conti, CEO of Enel, and Andrea Brentan, whom Enel placed as CEO of Endesa.

However, relations began to deteriorate after the relay of Conti by Francesco Starace and the departure of Brentan from Endesa. After the change, Enel decided to acquire its Spanish subsidiary assets in Latin America (Argentina, Chile, Brazil, Peru and Colombia), an operation that was not well seen by the president of Endesa because it supposed de-Spanishization of the company. However, he had to mediate with the Spanish Government and remained in office, which was renewed in 2015. Now, four years after that renewal, the Italian parent decided not to renew him. The exit supposes a compensation superior to the 12 million euros.

Enel landed at Endesa in 2007 after a bloody business battle with political overtones. The Italian group, led by Acciona and with the support of the Zapatero government, launched a bid on Endesa, which had already agreed to the entry of the German E.ON in response to the first attempt of Gas Natural (today Naturgy), that ended up retiring. Acciona was left with 25%, which it sold two years later, taking over Endesa's wind assets. Enel reached 92%, which would later reduce to 70%, due to a commitment from Prado so that at least there was some Spanish capital.

The loss of Spanishness has been wielded by the unions, which have accused Starace of decaffeinating the company. According to the unions, Enel has breached the commitments made in the OPA, since it has not maintained the geographical perimeter (sale of Latin American assets), the management has moved to Italy, strategic investments have been reduced and the business has been sold of gas distribution. In addition, contracts with suppliers have been diverted to Italy, in many cases at higher prices than in Spain, according to the unions.

The union offensive continued in a letter that UGT sent to Prado, Bogas and the five independent directors in which he accused Enel of "plundering" the Spanish firm and wanted to sell it "to the highest bidder". This possibility has been denied by the Italian group, which accused the syndics of wanting to put pressure on the negotiation of the collective agreement and which Enel had no intention of disinvesting. The union siege had no impact on the Sanchez government, or in Parliament, despite appeals to political groups.


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