Mps, yes to the split: non-performing loans and debts go to Amco

MPS doubles up and approves the demerger that will lead to the transfer of non-performing loans and liabilities to Amco (an asset management company held by the Treasury). This was decided on Sunday by the extraordinary shareholders' meeting of Banca Monte dei Paschi di Siena under the chairmanship of Patrizia Grieco. It accounts for it a press release from the Sienese bank which thus lays the operational premises for the implementation of the Hydra plan which should in turn facilitate privatization and the exit of the MEF once the bank has been relieved of the burden of non-performing loans.

Here are the detailed decisions that were approved by the assembly with a 99,97% majority:

– the approval of the proportional partial demerger project of MPS Capital Services Banca per le Imprese SpA (“MPSCS”) in favor of MPS, with the relative attachments (the “MPSCS Project”); 

– the approval of the project for the partial non-proportional demerger of MPS in favor of AMCO – Asset Management Company SpA with the attribution of an asymmetric option to the shareholders of MPS, other than the Ministry of Economy and Finance, with the relative attachments; And 

– the modification of paragraphs 1 and 2 of the art. 6 of the Bank's Articles of Association (relating to the Bank's share capital), as a result of the approval of the AMCO Project. 

Source: Banca Mps press release

The statutory amendments, explains Mps, were necessary because, "as a result of the AMCO Demerger (as defined below) there will be a reduction in the Bank's share capital of €1.133.606.063,29, with the consequent cancellation, taking into account of the roundings deriving from the application of the exchange ratio of the AMCO Demerger, of maximum no. 137.884.185 outstanding shares”. 

At the same time as the MPS meeting, the Amco meeting was also held, which in turn approved the Amco project, while Monte Paschi Capital Services had already given its go-ahead on 2 October last.

The operation will be operational from 30 November and yet the Banca MPS press release does not specify the total amount – there was talk of a figure close to 8 billion – of the non-performing loans that will be transferred to the bad bank which will also acquire the liabilities. Among these, the bridging loan of 3,1 billion. The amount (indicated above) of the capital reduction resulting from the spin-off is specified. Minority shareholders will be able to resort to the so-called asymmetrical option by renouncing to become shareholders of 10% of the bad bank and instead remaining shareholders only of MPS with a consequent percentage increase in its shareholding in the bank.

Shareholders who have not approved the project will be able to exercise the right of sale and the right of withdrawal the value of which has been set at "1,339 euro for each MPS share, within fifteen days of the date of registration of the resolution approving the AMCO Demerger with the Companies Register of Arezzo - Siena", finally specifies the press release.

Both the demerger of Mps Capital Services and the demerger of Amco obtained the green light from the ECB which set certain conditions, announced by the bank on August 27.