Fincantieri Hit by Profit Warning
Shares in Fincantieri plunged as much as 18 percent Thursday after the Italian shipbuilder said problems in Brazil would hit second-half results at a unit which accounts for more than a quarter of group revenue.
Italian daily Corriere della Sera reported speculation that the group was considering a cash call of at least 500 million euros ($572 million).
Fincantieri said in a statement no decision had been taken yet on a possible share sale and no adviser had been hired.
According to Corriere, Fincantieri CEO Giuseppe Bono may seek board approval at a meeting on November 10.
"News is a negative for Fincantieri which is expected to be under pressure due to the dilution coming from the potential capital increase," Mediobanca Securities said in a note.
By 0945 GMT shares in Fincantieri lost 11.5 percent at 0.6115 euros.
The company said on Thursday that third-quarter and full-year results at its VARD unit would be "materially negatively affected" by operational challenges at the group's Brazilian shipyards compounded by the country's economic and political troubles.
The Brazilian economy has sunk into a recession after shrinking 1.9 percent in the second quarter.
Singapore-listed VARD accounted for 27.5 percent of the total revenue in the first half. The unit, which builds support vessels for oil and gas exploration and production, has been under pressure due to a slide in oil prices.
Reporting a halving in first-half profit to 12 million euros in July, Fincantieri blamed falling margins on cruise ships under construction and the "persistent crisis" of oil and gas markets.
Fincantieri is 72 percent owned by state lender Cassa Depositi e Prestiti (CDP) through holding company Fintecna after the rest was sold in an initial public offering in mid-2014 as part of Italy's privatization efforts.
To complete the listing, Fincantieri was forced to cut the size of the offering by a third and price its shares at the bottom of the range indicated.
At Wednesday's close, the firm was valued at 1.16 billion euros.
($1 = 0.8740 euros)