The Monte dei Paschi foundation, which holds 33.5 percent of the
bank, has been seeking to sell all or part of its stake to pay back
around 350 million euros ($478.9 million) of debt, but has so far
failed to find a buyer and is keen to win more time.
Monte dei Paschi, by contrast, wants to launch the share issue as
soon as possible. A preliminary commitment by a pool of banks to
underwrite the cash call expires at the end of January.
The cash call is required as part of a restructuring demanded by the
European Commission for approving state aid, which Monte dei Paschi
received earlier this year.
The size of the rights issue is higher than the lender's stock
market value, which has fallen to 1.96 billion euros after a string
of negative sessions for the stock.
If no capital increase is launched by January 31, the
pre-underwriting agreement with the banks would end and Monte dei
Paschi would have to restart negotiations to form a new consortium
guaranteeing the rights issue, the bank has said.
The board of the Monte dei Paschi foundation said on Friday that the
3 billion euro rights issue proposal, to be voted on at a December
27 shareholders meeting, needed to be delayed to after May 12.
"Should the capital increase implementation be maintained for the
first quarter of 2014, the vote of the MPS Foundation will be
contrary to that proposal," it said in a statement.
Shares in Monte Paschi have lost nearly 13 percent this week with
traders citing uncertainty over the foundation's moves and the
prospect for the rights issue. They closed at 0.1630 euros on
Friday, down almost 3 percent on the day.
"There is uncertainty over whether the capital hike will go through
and the stock is likely to fall more as we approach the Dec. 27
date," a Milan-based trader said earlier.
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The foundation's options are limited. If Monte dei Paschi's shares
fall further to around 0.12 euros, its stake in the lender could be
seized by creditor banks, some of which are also part of the pool of
10 banks, led by UBS <UBSN.VX>, ready to guarantee the capital
"Several times we have told the foundation to sell its shares and
not to wait until the stock price was under pressure," said a source
close to the foundation's creditors.
Monte Paschi was kept afloat by the bailout earlier this year,
plugging a capital shortfall which arose after the bank was hit hard
by the euro zone debt crisis. It is on track to post its third
straight annual loss.
The bank is also at the center of a judicial probe over its costly
acquisition of smaller rival Antonveneta in 2007 and loss-making
derivatives trades it made in the deal's aftermath.
($1 = 0.7308 euros)
Silvia Aloisi and Gavin Jones; editing by Anthony Barker and David
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