Tension rises ahead of Monte Paschi meeting on cash call

Fri Dec 27, 2013 9:07am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Silvia Aloisi

SIENA, Italy (Reuters) - Tensions at troubled Monte dei Paschi di Siena (BMPS.MI: Quote) grew on Friday with sources saying Chairman Alessandro Profumo may quit if the Italian bank's top investor slaps him on the face by delaying a vital 3 billion euro ($4.11 billion) capital hike.

The world's oldest bank was forced to accept 4.1 billion euros of state aid earlier this year after being hammered by the euro zone debt crisis and loss-making derivatives trades.

The Tuscan bank needs a cash call to repay the state aid and avert nationalization. Profumo and CEO Fabrizio Viola want to launch it in January and have asked shareholders to approve this time framework this week.

They have already secured a pool of banks ready to guarantee the rights issue and would like to carry it out quickly to remove uncertainty and avoid a string of cash calls by other European lenders that might make fundraising harder.

But the biggest shareholder - a cash-strapped not-for-profit foundation with close ties to politicians in Siena - is determined to push back the cash call to mid-2104 to win more time to sell down its 33.5 percent stake and repay debt.

A shareholder meeting due on Friday had to be reconvened for Saturday as only 49.3 percent of investors showed up, below the required 50 percent plus one legal threshold. This was mainly due to small investors still enjoying the Christmas break.

On Saturday, the quorum will be lowered to one third of shareholders, allowing the foundation to easily postpone the capital increase.

A stone-faced Profumo left Friday's aborted meeting without making comments.   Continued...

People are reflected in the window of a Monte Dei Paschi Di Siena bank in Rome January 29, 2013. REUTERS/Max Rossi