Monte dei Paschi to launch share issue Dec. 19 | Reuters

MILAN Troubled Italian bank Monte dei Paschi di Siena will offer new shares for sale between Monday and Thursday in a last ditch attempt to raise 5 billion euros ($5.2 billion) by the end of the year and avoid a state bailout.The European Central Bank has told Italy's third-largest bank to raise capital this year and offload 28 billion euros in bad loans but finding investors has proved difficult amid political turmoil and this month's change of government.Monte dei Paschi said on Sunday its share offer for institutional investors, which accounts for 65 percent of the total, would run until 1300 GMT on Thursday.The offer aimed at current shareholders and retail investors will end at 1300 GMT on Wednesday.Monte dei Paschi said in a document on its website that, if successful, the share issue could raise up to 3.2 billion euros. The rest of the capital needed would come from a voluntary debt-to-equity conversion offer on the bank's junior debt which has already raised around 1 billion euros. On Friday, the bank said it was reopening the conversion offer until Wednesday and extending it to retail investors owning 2.1 billion euros of its junior debt.Italy is ready to step in to rescue the country's third-largest bank should the fundraising plan fail.

Reuters December 18, 2016 19:02:27 IST
Monte dei Paschi to launch share issue Dec. 19
| Reuters

Monte dei Paschi to launch share issue Dec 19
 Reuters

MILAN Troubled Italian bank Monte dei Paschi di Siena will offer new shares for sale between Monday and Thursday in a last ditch attempt to raise 5 billion euros ($5.2 billion) by the end of the year and avoid a state bailout.The European Central Bank has told Italy's third-largest bank to raise capital this year and offload 28 billion euros in bad loans but finding investors has proved difficult amid political turmoil and this month's change of government.Monte dei Paschi said on Sunday its share offer for institutional investors, which accounts for 65 percent of the total, would run until 1300 GMT on Thursday.The offer aimed at current shareholders and retail investors will end at 1300 GMT on Wednesday.Monte dei Paschi said in a document on its website that, if successful, the share issue could raise up to 3.2 billion euros.

The rest of the capital needed would come from a voluntary debt-to-equity conversion offer on the bank's junior debt which has already raised around 1 billion euros. On Friday, the bank said it was reopening the conversion offer until Wednesday and extending it to retail investors owning 2.1 billion euros of its junior debt.Italy is ready to step in to rescue the country's third-largest bank should the fundraising plan fail.

Under new rules Europe introduced in the wake of the financial crisis to shield taxpayers, investors in a failing lender must bear losses before public money can be tapped.A source familiar with the matter on Friday said Italy's government would inject capital into Monte dei Paschi only after the forced conversion of 4.1 billion euros worth of subordinated bonds into shares.

The bank said in the offer document that its liquidity of 11 billion euros as of Dec. 14 could run out in the following 12 months due in part to its main depositor taking around 2 billion euros out of its current account.($1 = 0.9574 euros) (Reporting by Valentina Za; Editing by Elaine Hardcastle)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

US designating six Chinese media outlets as 'foreign missions', announces Secretary of State Mike Pompeo
World

US designating six Chinese media outlets as 'foreign missions', announces Secretary of State Mike Pompeo

The move will further foment tensions in already deteriorating ties between the world’s two largest economies as President Donald Trump seeks to boost his anti-China credentials ahead of November’s election

India and US need each other to achieve their goals, but strengthening both democracies is crucial
World

India and US need each other to achieve their goals, but strengthening both democracies is crucial

India’s democracy is key to sustaining the momentum of its Indo-Pacific vision over the turbulent years to come.

China to impose sanctions on Lockheed Martin, Boeing, Raytheon and other US firms over Taiwan arms sales
World

China to impose sanctions on Lockheed Martin, Boeing, Raytheon and other US firms over Taiwan arms sales

Foreign ministry spokesman Zhao Lijian said the sanctions were "to safeguard national interests" and would apply to those who have "behaved badly in the process of arms sales to Taiwan"