Green light for the capital increase up to 3 billion and shareholders' meeting called for December. The board of directors of Monte dei Paschi di Siena, which was convened yesterday afternoon for this morning at 9, has resolved to propose to the extraordinary shareholders' meeting a paid capital increase for a total maximum amount of 3 billion euros. The meeting has been convened in Siena for the 27th and 28th and if necessary for the 30th December, respectively on first, second and third call, at 9.00 in Viale Mazzini 23. In the event of the green light and the obtaining authorizations from also the competent Authorities, MPS expects the capital increase under option to be completed within the first quarter of 2014. The stock dropped 5,6% on a day marked by suspensions due to excessive downtrends and a theoretical drop of up to -9%.
The reaction of the mayor of Siena was not long in coming in the face of the acceleration of the capital increase dossier. "The assembly must not take place before the Foundation has paid off its debts", said Bruno Valentini, adding: "I support the Foundation's line without any hesitation, which needs time". "This does not mean that the recapitalization cannot be carried out in January but only if the Foundation, also thanks to the bank, has found the answers to its problems on that date", he specified with reference to the 350 million euro debt that the Palazzo Sansedoni has with the creditor banks and noting that the time factor is "an objective that must be thought of by virtue of everyone's interests".
For the mayor, they want to find a "only financial solution for which the role of responsible and balanced leadership on the part of the Foundation is killed". "I wonder if all the members of the board representing the Foundation have been able to serve the interests of both bodies", he said, specifying that "decisions taken at the time in Palazzo Sansedoni leave very little room for maneuver for those who now manage the Foundation and she has courageously assumed this role and seems to want to fully represent the interests of a community that has chosen her”. "In the past - concluded VAlentini - it was the bank that dragged the Foundation into the quicksand of debt and now it cannot watch without reacting to the shipwreck of its main shareholder".
The capital increase is one of the actions identified in the 2013-2017 restructuring plan, which is currently being examined by the Commission for the definitive green light and which has been presented to the market in its general guidelines. The resources collected with the increase, which according to the agreements with Brussels must be completed by 2014, will be used to repay the Monti bonds, as envisaged in the restructuring plan, and to meet the charges related to the 2013 coupon, payable in 2014, and the costs of the capital increase itself.
In detail, the capital increase provides for the issue of new ordinary shares with regular enjoyment to offer option to holders of ordinary shares of Banca Monte dei Paschi di Siena and can be followed in divisible form by 31 March 2015. The BoD also resolved to propose for approval by the extraordinary shareholders' meeting the proposal to reverse stock split in the ratio of 1 new ordinary share for every 100 existing ordinary shares.
The shareholders are called to the meeting to approve the increase and to grant the BoD the power to define the methods and terms and, close to the start of the operation, the subscription price of the newly issued ordinary shares, the maximum number of new ordinary shares to be issued and the related option ratio.
In terms of banks that will intervene in the operation, UBS will act as global coordinator and bookrunner, while Citigroup, Goldman Sachs International and Mediobanca – Banca di Credito Finanziaria SpA will act as co-global coordinators and joint bookrunners. In addition, Barclays, BofA Merrill Lynch, Commerzbank, JP Morgan, Morgan Stanley and Société Générale Corporate & Investment Banking will act as joint bookrunners. These banks, a pool of more than ten banks, signed a pre-underwriting agreement for the subscription of newly issued ordinary shares that may have remained unopted. Ubs assists MPS as financial advisor and MPS Capital Services as co-financial advisor, while legal advisor is Linklaters.
Also summoned the ordinary shareholders' meeting for 27 December and, if necessary, for 28 December in second call, with the appointment of four directors on the agenda: Beatrice Bernard, Marina Rubini, Daniele Discepolo and Marco Miccinesi. A request for authorization to sell treasury shares held by Banca Monte dei Paschi di Siena will also be proposed.
