Italy’s government-orchestrated banking rescue fund will probably buy most of the shares in a planned 1.5 billion-euro ($1.7 billion) capital increase of Banca Popolare di Vicenza SpA, with institutional investors showing little interest, according to terms of the deal seen by Bloomberg.
Based on preliminary results, Atlante, the fund created to help the country’s troubled lenders, is expected to take up “the vast majority of the capital increase,” according to terms released before books closed Friday afternoon. The institutional book has seen “limited demand,” they said.
Pop. Vicenza is seeking to tap investors to comply with a request from the European Central Bank, which warned that the lender could face bankruptcy proceedings without a capital increase. Atlante has already agreed to buy unsold shares in Pop. Vicenza’s initial public offering replacing UniCredit SpA as guarantor.
Pricing and allocations of shares are expected to be confirmed Friday. The Italian stock exchange will decide whether there’s enough of a free float for the admission to listing on May 2, two days before the planned start of trading, according to the terms.
“Atlante has the financial resources to fully support Pop. Vicenza’s capital increase,” Alessandro Penati, president of manager Quaestio, said at a conference in Milan Friday.
The bank’s capital ratios dropped below the regulatory minimum requirement after inspectors from the ECB discovered last year that previous managers executed share sales in 2013 and 2014, lending 1.1 billion euros to customers and then asking them to purchase shares at a set price.
Pop. Vicenza recorded 700 million euros to 800 million euros of outflows this year as clients withdrew deposits exceeding the threshold for compensation in the event of a resolution.
To contact the reporters on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net, Sonia Sirletti in Milan at ssirletti@bloomberg.net. To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net, Ross Larsen
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