The financial evaluation agency S&P on Thursday worsened the outlook attributed to Enel SpA, citing the execution risks of the asset sale plan announced last month by Italy’s largest utility company, Reuters reports.

Also, S&P confirmed the long- and short-term ratings “BBB+/A-2” granted to Enel.

At the presentation of the updated strategy, Enel SpA informed that it intends to sell assets worth 21 billion euros to reduce its net debt, going to focus on its presence in six countries. Most of the asset sale plan – which targets, among others, assets in Romania, Argentina and Peru – will be carried out by the end of 2023, Enel informed in a statement. Enel’s objective is to reduce its net debt to 51-52 billion euros by the end of 2023, from 69 billion euros on September 30, 2022, according to Agerpres.

“The negative outlook reflects the fact that the company’s massive asset rotation plan is subject to execution risks, while high capital expenditures and significant shareholder remuneration affect the group’s financial risk profile,” the S&P statement said.

According to the agency’s calculations, Enel’s adjusted net debt could reach a peak level of approximately 82 billion euros this year.

Government measures in Italy and Spain to mitigate the impact of high energy bills on households and companies will affect the cash flow of Enel, which, as of September 30, 2022, reported a negative working capital of 5 billion euros.

“We forecast that Enel will continue to generate negative cash flow of approximately 4 billion euros in 2023, after investments of 12.5 billion euros, and dividends of approximately 5.5 billion euros – based on Enel’s commitments to increase dividends at 0.43 euros per share,” S&P appreciates.

The agency claims that 2023 will be a crucial year for the state-controlled utility company.

“Financial and operational performance in 2023, along with an adequate liquidity reserve (buffer), will be critical for maintaining the rating,” warns S&P.