MILAN, Oct 15 (Reuters) – Shares in Fincantieri plunged as a lot as 18 % Thursday after the Italian shipbuilder mentioned issues in Brazil would hit second-half outcomes at a unit which accounts for greater than 1 / 4 of group income.

Italian every day Corriere della Sera reported hypothesis that the group was contemplating a money name of no less than 500 million euros ($572 million).

Fincantieri mentioned in a press release no choice had been taken but on a potential share sale and no adviser had been employed.

According to Corriere, Fincantieri CEO Giuseppe Bono could search board approval at a gathering on Nov. 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 mentioned in a notice.

By 0945 GMT shares in Fincantieri misplaced 11.5 % at 0.6115 euros.

The firm mentioned on Thursday that third-quarter and full-year outcomes at its VARD unit could be “materially negatively affected” by operational challenges on the group’s Brazilian shipyards compounded by the nation’s financial and political troubles.

The Brazilian economic system has sunk right into a recession after shrinking 1.9 % within the second quarter.

Singapore-listed VARD accounted for 27.5 % of the overall income within the first half. The unit, which builds help vessels for oil and gasoline exploration and manufacturing, has been underneath strain as a result of a slide in oil costs.

Reporting a halving in first-half revenue to 12 million euros in July, Fincantieri blamed falling margins on cruise ships underneath building and the “persistent crisis” of oil and gasoline markets.

Fincantieri is 72 % owned by state lender Cassa Depositi e Prestiti (CDP) by way of holding firm Fintecna after the remainder was offered in an preliminary public providing in mid-2014 as a part of Italy’s privatisation efforts.

To full the itemizing, Fincantieri was pressured to chop the scale of the providing by a 3rd and value its shares on the backside of the vary indicated.

At Wednesday’s shut, the agency was valued at 1.16 billion euros.

($1 = 0.8740 euros) (Reporting by Valentina Za; enhancing by Jason Neely and Elaine Hardcastle)

(c) Copyright Thomson Reuters 2015.

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