Top Monte Paschi investor says to vote for cash call delay

Fri Dec 6, 2013 1:50pm EST
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By Stefano Bernabei and Paola Arosio

MILAN/ROME (Reuters) - The top investor in troubled Italian bank Monte dei Paschi di Siena (BMPS.MI: Quote) said it would only support the lender's planned January share issue if it is postponed to the second quarter of next year, throwing the operation into doubt.

The Monte dei Paschi foundation, which holds 33.5 percent of the bank, has been seeking to sell all or part of its stake to pay back around 350 million euros ($478.9 million) of debt, but has so far failed to find a buyer and is keen to win more time.

Monte dei Paschi, by contrast, wants to launch the share issue as soon as possible. A preliminary commitment by a pool of banks to underwrite the cash call expires at the end of January.

The cash call is required as part of a restructuring demanded by the European Commission for approving state aid, which Monte dei Paschi received earlier this year.

The size of the rights issue is higher than the lender's stock market value, which has fallen to 1.96 billion euros after a string of negative sessions for the stock.

If no capital increase is launched by January 31, the pre-underwriting agreement with the banks would end and Monte dei Paschi would have to restart negotiations to form a new consortium guaranteeing the rights issue, the bank has said.

The board of the Monte dei Paschi foundation said on Friday that the 3 billion euro rights issue proposal, to be voted on at a December 27 shareholders meeting, needed to be delayed to after May 12.

CAPITAL HIKE   Continued...

The Monte dei Paschi bank headquarters is pictured in Siena August 16, 2013. REUTERS/Stefano Rellandini