ROME, The recapitalization of 5 billion euros requested to the market from the Monte dei Paschi di Siena failed, and the board of directors of the bank, having regard to the outcome, it was to ask the help of the State. The government, which in recent days has received from the Parliament the authorization to a greater expense up to a maximum of 20 billion euro, and for the most part not have an impact on the deficit, will speak, therefore, with a share capital increase of “precaution” in support of the bank, as a solvent, but forced by the vigilance of the Ecb to dispose of non-performing loans, with the resulting losses to be offset with cool means.
Taken note of the failure on the market, the bank’s top management have contacted formally by the minister of the Economy and started the procedure, quite articulate, to implement the rescue. Pier Carlo Padoan has immediately informed the prime minister, Paolo Gentiloni, and would have had contacts also with the Bank of Italy. Late in the evening, however, the Council of ministers is necessary to establish the decree and proceed with the intervention had not yet met. Today, in each case, securities of the Mps, a decision from Consob, shall remain suspended from trading on the Stock exchange.
The capital increase on the part of the State, considered that the sale of the receivables will happen now in terms and conditions different from those defined together with the capital increase of 5 billion on the market, it may not be of the same amount. And according to the european directives, would result in the sacrifice of the current shareholders, which would dilute their shares, and bondholders subordinated, with the conversion of the bonds into shares at less favourable conditions than those offered by the same bank.
The ugly skirmishes on the outcome of the capital increase you were warned already in the past few days. The small bondholders had accepted the mass conversion of the bonds into shares, and were collected 2.4 billion. But the front of institutional investors remained cold. With a note published in the late afternoon, the board of directors of the bank did know that were not gathered in the “investment orders sufficient to reach the 5 billion”, the sum required to permit the transfer of non-performing loans, “and the achievement of the other objectives of strengthening the balance sheet”. Not it is clear that a shareholder is able to assume an important role and this has impacted negatively on the decisions of institutional investors, limiting significantly the subscription orders”.
The failure of the capital increase is to be less the sale of the sufferings, at least for now and in the terms in which it was concocted. And blast the conversion of the subordinated bonds: the qualifications “will be returned to the respective carriers,” explains the institute, emphasizing that the business banks of the consortium for the placement, such as JP Morgan and Mediobanca, will not receive commissions.
The decree of the executive, should provide for, in addition to the establishment of the Fund for the recapitalization of the precautionary Monte Paschi and possibly other banks in difficulty, the activation of a guarantee on the liquidity of the system, the extension of the terms for the transformation of the popular banks in the spa and tax rules for cooperative credit banks.
December 22, 2016 (change on December 22, 2016 | 23:32)
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