Shareholders of Italy’s troubled Banca Monte dei Paschi di Siena — the world’s oldest bank — on Saturday voted to postpone until the middle of next year a giant capital increase needed to stave off nationalization.
Management had wanted the 3 billion euro (US$4 billion) capital increase to be completed by next month, but a shareholder meeting overwhelmingly backed a proposal by the bank’s foundation, which owns a 33.5 stake in the lender, to delay the cash call until May or June.
Paying for the capital increase would hit the foundation badly, prompting it to seek more time to sell its shares to a third party.
The shareholders’ meeting in Siena was originally scheduled to be held on Friday, but it had to be moved to Saturday because there were not enough shareholders present to meet the required 50.1 percent threshold.
A delay in recapitalization could be critical as the European Commission has demanded that the operation be completed by the end of next year so as to reimburse the state credits the bank received to avoid collapse.
The shareholders’ vote will come as a blow to chairman Alessandro Profumo, who had earlier warned that a delay in raising the capital would carry “grave risks,” and there were reports that he and chief executive Fabrizio Viola could resign if they did not get their way.
The head of the bank’s foundation, Antonella Mansi, meanwhile had argued that a capital increase next month would “destroy the foundation’s wealth.”
Speaking to shareholders on Saturday, Mansi said management’s proposal had “no chance of being approved.”