Italy’s biggest gas distributor Italgas does not believe the country’s referendum on constitutional reform in December will affect new rules to streamline gas distribution, its chief executive said on Monday.

“I don’t think it will have an affect because under the new rules the regions stand to benefit from increased investments and better technology,” Paolo Gallo told Reuters.

Prime Minister Matteo Renzi has said he could resign if he loses the Dec. 4 ballot and some analysts are worried his departure could derail these reforms.

Italy’s gas distribution sector is highly fragmented with more than 200 operators. The new rules, which will reduce so-called concession areas (ATEMs) to just 177 from almost 7,000, aim to make the industry less complex.

Italgas, the third biggest gas distributor in Europe, is looking to increase its market share to about 40 percent from the current 34 percent.

“The first ATEMs that interest us most are those 40 or so where we already have a very high market share,” Gallo said.

Italgas could consider buying smaller gas distributors across Italy to boost growth but only after the new concession tenders are awarded, Gallo said.

The company has previously said it expects the 177 tenders to take place over the next 4-5 years.

Earlier this year, sources told Reuters that Italian state lender Cassa Depositi e Prestiti (CDP) had looked at merging Italgas with the second biggest player 2i Rete Gas to create a national champion.

Italian gas grid company Snam spun off Italgas earlier this month as part of its plans to focus on energy transmission and storage across Europe.

CDP, an indirect shareholder of 2i Rete Gas, is Italgas’s main shareholder.

Since its listing on Nov. 7, Italgas shares have lost about 22 percent as rising bond yields triggered by fallout from the U.S. presidential election took their toll on utilities.

On Monday, Italgas said it had approved a 2.8 billion euro ($2.97 billion) EMTN program to diversify its financing sources.

“We are ready to issue bonds of 500-700 million euros each with maturities of 7-10 years,” Gallo said, adding that they would wait for a window of opportunity.

He said the company also expected to complete a 15-year 300 million euro loan with the European Investment Bank in the coming weeks to help to refinance bilateral facilities worth 500 million euros.

Italgas, which expects to have a net debt of 3.7 billion euros at the end of the year, has around 4.3 billion euros of committed banking facilities.

Source:www.reuters.commedia