Monte Dei Paschi Backs EUR8.14 Billion Bad-Debt Transfer Plan
30 Juni 2020 - 8:16AM
Dow Jones News
By Mauro Orru
Banca Monte dei Paschi di Siena SpA said late Monday that it has
approved a plan to transfer non-performing exposures, deferred tax
assets, other assets, financial debt, other liabilities and net
equity to Asset Management Company SpA, an Italian state-owned
manager of bad loans.
The Italian bank, in which the Italian government has a stake of
more than 68%, said that the deal envisages the transfer to AMCO of
non-performing exposures amounting to 8.14 billion euros ($9.15
billion), liabilities of EUR3.18 billion from a bridge loan backed
by JPMorgan Chase & Co. and UBS Group AG, as well as net equity
of EUR1.09 billion.
The transfer is set to bring about a significant improvement in
the bank's risk profile and a reduction in the cost of funding.
Monte dei Paschi has in recent years undergone a major overhaul
that included state recapitalization, the disposal of billions in
bad loans and job cuts.
MPS Capital Services Banca per le Imprese SpA, 100% owned by
Monte dei Paschi, holds part of the assets and liabilities to be
transferred, the bank said, and the transfer will take place
through a demerger.
The Italian government stake in Monte dei Paschi could shrink to
just under 64% after the deal, depending on the mechanics of the
transaction.
The demerger is expected to be effective as of Dec. 1, the bank
said.
The announcement comes a month after Monte dei Paschi said it
was in talks with Italy's market regulator Consob and the European
Central Bank to define "the relevant regulatory steps" before the
transaction can start.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
June 30, 2020 02:01 ET (06:01 GMT)
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