Valentina Za and Giuseppe Fonte
MILAN (Reuters) – Monte dei Paschi di Siena faces urgent A timetable to secure a stake sale for cornerstone shareholders of up to 2.5 billion euros ($2.4 billion) after an election moratorium that ended investors noncommittal on Monday.
After leading a conservative coalition to victory in Sunday’s vote, Giorgia Meloni looks set to become Italy’s first female prime minister in the most right-wing government since World War II.
Maurizio Leo, senior economic adviser to Italian Brotherhood leader Meloni, said the MPS was well controlled.
“We believe CEO Luigi Lovaglio can see through the deal,” he told Reuters, adding: “He has experience and he can deliver.”
MPS faces raising more than eight times its current market value 300 million euros five years after a rescue package that provided 8.2 billion euros in capital.
This means it is not
State-owned MPS plans to issue new shares in October 300 in order to raise the required funds in time, Terminate 3 500 employees using early retirement rules that end after November.
Lovaglio sources said the participation of insurer Axa and asset manager Anima Holding was delayed despite the willingness of MPS’ key business partners to play a role in its recapitalization.
Anima ready to offer up to 200 As part of a strengthened business partnership with MPS, the Tuscan bank may need France’s Axa for the deal to provide as much funding as possible, two people familiar with the matter said.
The state will bear 64% of the funds raised by the MPS, but the rest must come from private hands under EU rules restricting state aid lenders.
After a standoff that angered some of the eight banks in the MPS underwriting consortium, Lovaglio finally agreed to meet Anima and Axa executives in London last week.
But no financial details have been finalized with either party, meaning time is tight, especially when it comes to revising Anima’s contract with MPS, one of the people said.
Unlike Anima, Axa will not change its “bancassurance” joint venture with MPS, but will simply buy a portfolio of insurance contracts that allow MPS to forecast future revenue, the people said.
All parties involved declined to comment.
The bank organising this share sale regards the participation of cornerstone investors as a fundamental principle. If, based on investor feedback, the sale is unlikely to be successful, they can waive appropriate underwriting commitments.
The cash call is likely to be completed before the new government is formed in late October or early November, with offers expected to last three weeks from October. 10.
Meanwhile, MPS stock failed to trade on Monday after a reverse stock split paved the way for a capital increase. Borsa Italiana said it would not allow orders for MPS shares without price limits after the market closed.
($1=1.0338 EUR)
