Monte Paschi Falls on Capital-Raising Concern: Milan MoverSonia Sirletti
Banca Monte dei Paschi di Siena SpA extended a two-day losing streak in Milan, falling to a record low on concern that a planned stock sale may be delayed as its main investor struggles to find buyers for its stake.
Monte dei Paschi, Italy’s third-largest bank, fell as much as 2.9 percent to 15.3 euro cents, the lowest since it was listed in 1999. The lender was down 0.6 percent to 15.67 cents as of 12:30 p.m. The stock has fallen 31 percent this year, which left the Siena, Italy-based bank with a market value of 1.83 billion euros ($2.5 billion).
“The solutions available to Fondazione Monte dei Paschi remain very limited,” considering there is only a week before the shareholders meeting, Luca Comi an analyst at ICBPI Equity Research wrote in a note today. Investors of the world’s oldest bank meet Dec. 27 to vote on the bank’s 3 billion euro rights offering.
Fondazione Monte dei Paschi di Siena, which owns a 33.5 percent stake in the bank, wants to delay the stock sale after the first quarter to gain more time to repair its own finances before the sale. Monte Paschi’s management prefers to raise the capital in January to get ahead of other Italian banks that might need to raise capital as the European Central Bank reviews lenders’ balance sheets next year.
The Italian Treasury is monitoring the situation and is working to help the charitable foundation to find a solution for its debt, people with knowledge of plans have said.
Monte dei Paschi, Italy’s third-largest bank, fell as much as 2.9 percent to 15.3 euro cents, the lowest since it was listed in 1999. The lender was down 1.4 percent to 15.54 cents as of 10:30 a.m. The stock has fallen 32 percent this year, which left the Siena, Italy-based bank with a market value of 1.82 billion euros.
Chief Executive Officer Fabrizio Viola and Chairman Alessandro Profumo, appointed last year to turn around the 541-year-old Monte Paschi, need to gain the support of investors to proceed with an offering in January. They have pledged to cut jobs and raise capital to repay part of 4.1 billion euros of state aid after revelations the bank hid losses.
The foundations which are investors in Intesa Sanpaolo SpA and UniCredit SpA may buy Paschi shares from Fondazione Monte Paschi to help the company to repay debt, Il Sole 24 Ore reported yesterday. The Monte Paschi investor said late yesterday that it isn’t in talks to sell shares to other banking foundations.