Paschi's top managers seen staying despite cash call delay
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[January 14, 2014]
By Sophie Sassard
LONDON / MILAN (Reuters) — The top
managers at Italy's Monte dei Paschi di Siena <BMPS.MI> are not
expected to go through with threats to resign at a board meeting on
Tuesday despite being forced to delay a vital fundraising,
investment bankers close to the matter said.
Chairman Alessandro Profumo and Chief Executive Fabrizio Viola both
threatened to resign last month after their proposal for an
immediate 3 billion-euro ($4 billion) share sale was voted down at a
Both are among Italy's most respected bankers and their departure in
the middle of a tough turnaround plan would have dealt a serious
blow to Monte dei Paschi's hopes to pull off the rights issue, whose
size is bigger than its market value.
Tuesday's board meeting is the first since shareholders postponed
the share issue, which the Tuscan lender needs to pay back a
4.1-billion-euro state bailout and avert nationalization, to mid-May
at the earliest.
"Everybody expects Viola and Profumo to stay. This would be the best
solution to avoid further disruption and eventually get this deal
done," said an investment banker close to Monte dei Paschi.
A second banker familiar with the situation said he thought the pair
would remain, while a union official who took part in talks earlier
on Monday with Economy Minister Fabrizio Saccomanni about Monte dei
Paschi said the minister did not expect any "radical move" at the
Neither Profumo nor Viola were immediately available for comment.
The bank declined to comment.
The lender's top shareholder, a not-for-profit banking foundation
with close ties to local politicians, needs more time to sell part
or all of its 33.5 percent stake to pay back 340 million euros in
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According to three bankers familiar with the issue, the foundation
is in talks with other banking foundations and private equity and
hedge funds, including Blackstone <BX.N> and possibly Elliott
Management Corp. A fourth source said Blackstone was not involved in
any such discussion.
The foundation, which has denied that a deal with other foundations
is being discussed, declined to comment on Monday.
($1 = 0.7314 euros)
(Additional reporting by Stefano Bernabei in Rome, Paola Arosio and Silvia Aloisi in Milan;
by Lisa Jucca and Mark Potter)
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