- Rescue fund bought most bank shares after buyers balked
- Investor offers are contingent on bank's listing going ahead
Italian regulators will decide as soon as Monday whether Banca Popolare di Vicenza SpA is eligible for a listing on the Milan exchange after investors showed little interest in the lender’s 1.5 billion-euro ($1.7 billion) capital increase and a government-orchestrated rescue fund had to step in to buy most of the shares.
While investors offered to buy 7.7 percent of the shares, leaving the Atlante fund with 1.39 billion euros of the stock, bids are conditional on the exchange ruling the lender has enough free float to begin trading. Without that authorization, Atlante will buy all the shares, Popolare di Vicenza said in a statement late Saturday. If the listing is approved, trading will start on Wednesday.
Ten institutional investors subscribed for a 5.1 percent stake, according to the Vicenza, Italy-based bank. Investment bank Mediobanca agreed to buy about 5 percent of the initial public offering, a person with knowledge of the matter said on Saturday.
Popolare di Vicenza is seeking fresh funds to comply with a request from the European Central Bank, which said the lender could face bankruptcy proceedings without adding capital. The government and financial institutions last month set up the rescue fund to act as a backstop to bank fundraising efforts, to replace UniCredit SpA as guarantor for Pop. Vicenza and to mitigate risks of a so-called bail-in for bank bondholders.
The cabinet of Prime Minister Matteo Renzi on Friday approved a decree to let bondholders of four other small rescued banks be reimbursed for as much as 80 percent of their holdings if they have gross income of less than 35,000 euros or personal assets of less than 100,000 euros.
Popolare di Vicenza shares were sold at 10 cents apiece, at the bottom of the range set by the bank. On April 19 the bank set a symbolic price of 10 cents to 3 euros a share after saying few investors had expressed interest in the sale.
Popolare di Vicenza has recorded more than 700 million euros in outflows this year as clients withdrew deposits on concern their holdings exceeded the threshold for compensation if the bank is wound down.