UniCredit set to succeed with share sale

Fri Jan 20, 2012 7:30am EST
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By Silvia Aloisi and Gianluca Semeraro

MILAN (Reuters) - The 7.5 billion euro ($9.7 billion) rights issue by UniCredit SpA (CRDI.MI: Quote) looks set to be almost entirely taken up, allowing it to meet tougher capital requirements being imposed on the euro zone's beleaguered banks.

"Take-up could be around 97 to 98 percent," a source close to the banking consortium handling the issue told Reuters. Subscriptions are expected to be at least 95 percent, another consortium source said.

Friday is the last day of trading in rights to the heavily discounted new shares.

Some 31 European banks must tell their national regulators by Friday how they plan to fill the 115 billion euro collective hole in their balance sheets as part of moves to tackle the continent's sovereign debt crisis.

UniCredit's cash call will allow the Italian lender's core Tier 1 capital adequacy ratio to rise above the target of 9 percent of risk-adjusted assets required by the European Banking Authority and almost entirely plug the second biggest capital shortfall in the region after Spain's Santander (SAN.MC: Quote).

The two-for-one share offer ends on January 27 and will dilute 2012 earnings per share by around 65 percent, according to analysts' estimates.

The bank's chief executive Federico Ghizzoni said on Wednesday he was confident the sale would be successful, although the company's share price has fallen by around 70 percent in the past year.

The existing shares were trading ex-rights down over 2 percent at 3.29 euros by 1140 GMT, with the right to buy two of the new shares at 1.943 euros trading down 5 percent at 2.59 euros CRDI_r.MI.   Continued...