Monte Paschi Investors Back Enlarged 5 Billion-Euro Stock SaleSonia Sirletti and Sergio Di Pasquale
Banca Monte dei Paschi di Siena SpA won shareholder approval for an enlarged 5 billion-euro ($6.8 billion) share sale to repay state aid and bolster capital as regulators prepare to scrutinize European lenders’ assets.
Investors gave their backing to plans to increase the sale from the 3 billion-euro target the lender announced in November, Chairman Alessandro Profumo said at a shareholder meeting in Siena today. The bank, Italy’s third-largest, plans to start the offering in early June and complete it in a month.
Profumo and Chief Executive Officer Fabrizio Viola are seeking to turn around the bailed-out lender by cutting jobs and selling assets under a plan to return to profit by 2015. Monte Paschi will use the money to repay some of the 4.1 billion euros of state aid it received and boost capital to absorb any losses from the European Central Bank’s asset quality review.
“With this capital increase, Monte Paschi will get back to being a normal, restored bank,” Profumo told reporters at a press conference in Siena after the shareholder meeting. “Two years ago, no one would have bet on the bank’s survival.”
A group of 23 banks including Deutsche Bank AG and Banco Santander SA will oversee the rights offering. The transaction will cost Monte Paschi about 250 million euros.
The lender last month reported an eighth straight quarterly loss, hurt by interest charges on its bailout and charges from the Italian treasury.