Monte dei Paschi explores options as €2.5bn cash call falters
Monte dei Paschi di Siena’s management could begin to explore alternative options to a €2.5bn capital increase planned this month, after some arranger banks signalled their unwillingness to mop up shares in the ailing Italian lender should investors shun the sale.
Chief executive Luigi Lovaglio, a turnround specialist appointed this year by Mario Draghi’s government to revamp and privatise MPS, said in the summer that the Tuscan lender would launch a cash call partially backed by the Italian Treasury to restore capital buffers.
However, over the past two months both domestic and international investors signalled they would steer clear of the share issue. Two bankers in Milan said on Sunday that following a last-minute turn of events they still believed the capital raise was likely to succeed.
“When they put the bank up for sale in 2021 only Apollo and UniCredit entered the data room, which means it wasn’t a very attractive asset to begin with, then UniCredit made additional demands to the Italian Treasury after carrying out the due diligence,” which was a red flag according to one London-based investor.
A voluntary exit plan, which will see more than 4,000 staff leave MPS, is cited by investors as good news for the bank’s cost-saving strategy.
Finance minister Daniele Franco told parliament this year that the capital increase was a prelude to the bank’s privatisation. Italy missed the deadline to privatise the bank last year after a deal with Milan-based UniCredit fell through at the last minute.
This story originally appeared on: Financial Times - Author:Silvia Sciorilli Borrelli
