Monte Paschi expects approval of tougher restructuring plan on Sept 24

By IVCPOST Staff Reporter

Sep 09, 2013 05:54 AM EDT

Banca Monte dei Paschi di Siena announced that it has intended to approve its restructuring plan on September 24. Monte Paschi said the new reorganization scheme would be more stringent. The bank set the new guidelines so that it could get the approval of the European Commission for a state bailout worth EUR 4.1 billion.

The Italian Economy Ministry said the Italian lender would need to carry out a capital increase next year worth EUR 2.5 billion. The amount it would seek from investors would be equal to Monte Paschi's current market capitalization. The amount was also two times more than the original capital hike of EUR 1 billion proposed by the bank.

Monte Paschi is the oldest surviving bank in the world controlled by main shareholder, Fondazione Monte dei Paschi di Siena. It is also Italy's third largest bank. Earlier, Monte Paschi was involved in a derivatives scandal after it acquired competitor Antonveneta in 2008.

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