Banco Popolare Approves Up to EU1.5 Billion Stock Sale Amid Loss

Banco Popolare SC, (BP) Italy’s fourth-biggest bank, plans to sell as much as 1.5 billion euros ($2.1 billion) in shares to repay debt and boost capital and said it would post a net loss for 2013.

Banco Popolare’s board approved the stock offering today, the Verona-based company said in a statement. The sale will help repay 1 billion euros in convertible bonds and boost the bank’s common equity Tier 1 ratio under more stringent Basel 3 rules to about 10 percent. The full-year loss for 2013 will be about 600 million euros because of impairments and the higher cost of credit, the lender said.

Chief Executive Officer Pier Francesco Saviotti is selling assets and cutting costs to bolster the bank’s financial strength and profit before a European Central Bank review of balance sheets. Banco Popolare, one of 15 Italian banks that will be evaluated in the ECB assessment this year, plans to present a new business plan Feb. 27, the company said.

UBS AG and Mediobanca, which will manage the share sale and serve as global coordinators and bookrunners, have signed a pre-underwriting agreement.

The lender plans to hold an extraordinary shareholder meeting Feb 28 or March 1 to approve the rights offer.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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