ENDESA Submits a Binding Offer for Elettrogen in a Consortium Together With Banco Santander Central Hispano and the Italian ASM Brescia SPA.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 15, 2001

The consortium led by ENDESA (NYSE:ELE) and in which Banco Santander Central Hispano and the Italian ASM Brescia SPA also take part, has submitted a binding offer for the Italian Elettrogen. This company was put up for sale through an international controlled bid process as part of ENEL's divestiture plan.

ENDESA is the strategic and reference partner in the consortium. Banco Santander Central Hispano, takes part in the consortium as financial partner with a stake between 30 and 40%, between 15% and 20% for the Italian ASM Brescia SPA and the remainder for ENDESA, which in any case will be the majority shareholder. The final shareholding structure should be determined once and if Elettrogen is finally awarded to the consortium.

The offer has been submitted today, which was the deadline set for the delivery of the binding offers by the shortlisted companies. At the moment no deadlines have yet been set for the final awarding. Nevertheless a 90-day term starts today, during which ENEL will evaluate the offers, taking into account not only the price offered but also other factors which ENEL deems relevant. ENEL may award Elettrogen directly to the companies or consortia that have submitted binding offers or open a negotiation process for the final awarding, which will need to be ratified by the Italian Government.

ASM Brescia SPA is one of the four leading municipal utilities in Italy. It is 100% owned by the Council of Brescia, a city located in northern Italy. The company has its own generation plants and distributes electricity, water and gas to around 400,000 customers in the region.

Elettrogen is the first of the three companies which ENEL has put up for sale in which it has grouped the generation assets which it should divest in accordance with the measures approved by the Italian Government in March 1999. The other two are Eurogen and Interpower.

The company has an installed capacity of 5,418 MW, of which 4,424 MW are thermal and 1,014 MW correspond to hydroelectric plants. Its workforce is 1,721 and its average annual production is 17,000 GWh.

This offer is part of the expansion plan recently released by ENDESA and is expected to allow the company to explore the potential for growth in the complex European market. It is worth to mention the great strategic value of the Italian market due to the high prices for electricity which are expected in the future due to its technological mix.

Endesa has been prudent in the building of its presence in Europe through successive transactions such as the acquisition of 30% of the French SNET - which owns nine coal-fired plants with a total capacity of 2,603 MW - or the signing of a purchase agreement for the Dutch electricity and gas distributors REMU and NRE which is pending a decision from the Dutch parliament.

Besides, ENDESA is the first Spanish electric utility with eligible customers in Portugal, France and Italy and a licence for electricity supply in Germany. It is also present in two wholesale markets, the Dutch-based Amsterdam power Exchange (APX) and the Polish Gielda Energii.

As for trading of electricity, ENDESA carries out this activity through a joint venture agreement with Morgan Stanley Dean Witter. In the year 2000 over 350 transactions were made for a total 8,000 GWh, mainly in the Netherlands, Germany, Switzerland and Spain.