BMPS BoD approves upsizing of capital increase to EUR 5bn
The Board of Directors of Banca Monte dei Paschi di Siena met today and resolved unanimously to submit to the Extraordinary Shareholders’ Meeting a
proposal to upsize the share capital increase to up to maximum of EUR 5bn, replacing the original amount of EUR 3bn already approved on 28 December 2013.
In a context characterized by high uncertainty and limited visibility on the process of the Comprehensive Assessment, which includes stress test and AQR, conducted by the European Regulatory Authorities, the Bank has decided to align its capital ratios to best-in-class market standards. On a pro-forma basis, post the EUR 5bn capital increase and assuming the repayment of EUR 3bn of New Financial Instruments, the Bank CET 1 ratio at 31 December 2013 will amount to 13.6% with a phased-in equal to zero and 11.3%1 on a Basel 3 fully loaded basis.
The upsizing of the capital increase up to EUR 5bn is intended to provide the Bank with a capital buffer functional to the absorption of potential negative impacts arising from the Comprehensive Assessment and continue to meet its commitments under the Restructuring Plan.
Moreover, the larger size of the capital increase would allow BMPS to accelerate the implementation of the Restructuring Plan 2013-2017, to benefit from opportunities arising from a potential recovery of macro-economic conditions and the banking activity and to potentially accelerate, depending on the outcome of the Comprehensive Assessment, the full repayment of the New Financial Instruments with respect to the schedule agreed with DG Comp.
The Extraordinary Shareholders' Meeting will be convened on 20, 21 and, if necessary, 22 May in the first, second and third call respectively, at 9.30 am in Siena, Viale Mazzini 23. Along with the approval of the capital increase, the Extraordinary Shareholders' Meeting will be called upon to grant the Board of Directors all necessary powers to define the terms and conditions for the capital increase and, nearer to the start of the transaction, to set the subscription price for newly-issued ordinary shares, the maximum number of new ordinary shares to be issued and related rights exchange ratio.
The capital increase of EUR 5bn is already guaranteed by a pre-underwriting agreement which concerns - on certain terms and conditions – the commitment to underwrite any newly issued ordinary shares remaining unsold at the conclusion of the offer for a maximum amount equal to the total size of the capital increase. In particular, the same financial institutions that signed last March the pre-underwriting agreement, namely UBS as Global Coordinator and Joint Bookrunner, Citigroup, Goldman Sachs International and Mediobanca as Co-Global Coordinators and Joint Bookrunners and Barclays, BofA Merrill Lynch, Commerzbank, JP Morgan, Morgan Stanley and Société Générale as Joint Bookrunners, have agreed to modify the terms and conditions in line with the transactionproposed by the Shareholders’ Meeting.
As part of the transaction, UBS is acting as financial advisor to Banca Monte dei Paschi di Siena, MPS Capital Services is acting as co-financial advisor to Banca Monte dei Paschi di Siena and Linklaters is acting as legal advisor to Banca Monte dei Paschi di Siena.
Source Company Press Release*