Italy May Take on Soured Loans, Extra Branches in Paschi Deal
Italian public financial institutions may end up purchasing some assets of Banca Monte dei Paschi di Siena SpA that UniCredit SpA doesn’t want in a takeover of the bankrupt lender.
State lender Mediocredito Centrale SpA and state-owned asset manager AMCO SpA were given to access to Monte Paschi’s data room, according to a statement Tuesday. The Italian Treasury may be called on to provide guarantees on some problematic loans on Paschi’s books in order to get a deal done, Italian newspapers reported Wednesday.
Both moves would add further sweeteners for UniCredit to conclude a deal with Siena-based Monte Paschi. The world’s oldest bank has been a burden to the Italian state since it was first bailed out in 2009. While UniCredit has been linked to the lender for some time, Chief Executive Officer Andrea Orcel has set tough conditions for a purchase, according to people familiar with the matter.
AMCO may end up with around 8 billion euros ($9.4 billion) of Paschi’s non-performing exposures and soured loans, Il Sole 24 Ore reported on Wednesday. The lender will also have to shed some 300 branches, according to Il Messaggero, though just some of those in Southern Italy may eventually be purchased by MCC.
Overall, the state may need to guarantee 15 billion euros ($17.7 billion) in credit that UniCredit is balking at taking on in the deal, newspapers including La Stampa reported Wednesday.
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