Here Are Draghi’s Alternatives for Paschi Sale After UniCredit
Here Are Draghi’s Alternatives for Paschi Sale After UniCredit
(Bloomberg) -- Italian Prime Minister Mario Draghi’s government is working on alternative solutions for Banca Monte dei Paschi di Siena SpA, after efforts to sell the troubled Tuscan lender to UniCredit SpA fell apart.
- The treasury may go ahead with some of the measures envisaged in the talks with UniCredit to make a sale of Monte Paschi more compelling for new investors, people familiar with the matter said.
- The government is considering a stand-alone plan with a capital injection of as much as 3 billion euros ($3.5 billion), the sale of bad loans, some branches and voluntary redundancies or early retirement of some 2,000 staff, they said
- The government may still seek to revive talks with UniCredit in the future or find other investors for the assets, when the bank has been cleaned up, some of the people said
- A sale to another bank in the short term seems unlikely, with the only other possible player in country able to afford it --Banco BPM Spa -- saying it isn’t interested in Paschi. Read here.
The government will seek an extension to the year-end deadline for divesting the lender, which was nationalized in 2017, people with knowledge of the matter have said, adding that options for a solution will also depend on how much time they will be given.
While the European Commission rarely refuses an extension, it may need to consider if allowing more time gives the bank an additional advantage. It can ultimately seek changes to the terms of its state aid approval. Monte Paschi previously agreed to cut thousands of jobs in order to receive state aid in 2017.
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