Italian bank is urged to complete €3bn cash call
THE Italian government has urged Banca Monte dei Paschi di Siena to complete its planned €3bn cash call and avoid the threat of a state takeover after a stand-off between management and shareholders.
The bank, reeling from derivatives losses and weakened by years of economic crisis, needs fresh capital to pay back part of the €4bn in aid it received this year from former prime minister Mario Monti's government.
But plans for the rights issue were disrupted on Saturday when the main shareholder foundation forced a share sale to be delayed until mid-May, defying chairman Alessandro Profumo, who was pressing for it to be wrapped up in January.
The unprecedented clash between management and shareholders has left Mr Profumo's turnaround plans and the future of the bank in question, with the prospect of nationalisation looming if the capital raising is not completed before year-end.