Monte Paschi Shareholder Meeting Postponed as Quorum Not Met

Dec 27, 2013 5:19 am ET

Dec. 27 (Bloomberg) -- Banca Monte dei Paschi di Siena SpA, the bailed-out Italian bank, postponed a shareholder meeting called to approve a 3 billion-euro ($4.1 billion) stock sale after too few investors showed up.

The meeting was delayed until tomorrow after shareholders holding less than 50 percent of Monte Paschi’s stock took part, meaning the quorum wasn’t reached, Chairman Alessandro Profumo said today in Siena.

Monte Paschi is seeking the funds to help repay state aid and avert nationalization, and management is pushing for a January stock sale to get ahead of other Italian banks that might need to raise capital. Its main shareholder, Fondazione Monte dei Paschi di Siena, has said it will oppose the offering unless it’s delayed until after the first quarter to give it more time to repair its own finances.

“Considering the very short time frame, the probability of a postponement of the capital increase after January is very high,” Giuseppe Mapelli, an analyst at Equita Sim SpA in Milan wrote in a note to clients today. “This would be negative for the stock, increasing the probability of a management resignation and a failure of the restructuring process.”

Monte Paschi fell 0.8 percent to 17.54 cents by 10:57 a.m. in Milan trading, erasing earlier gains of as much as 4.6 percent. The stock has declined 22 percent in 2013.

Foundation ‘Serene’

The foundation, which owns a 33.5 percent stake in the world’s oldest lender, must reimburse about 340 million euros of loans by 2017 and has put up its stake in the bank as collateral. The dozen creditor banks will take ownership of the holding if Monte Paschi shares fall below 12.8 cents apiece, according to a person with knowledge of the transaction who asked to not be identified as the terms are private.

A delay in the rights offer would allow the foundation to find buyers for its shares and repay debt, foundation chairman Antonella Mansi has said.

“We’re serene, see you tomorrow,” Mansi told reporters after the meeting was postponed today. “Our attitude hasn’t changed -- we’re always open.”

Monte Paschi, engulfed in legal probes of alleged misconduct by former managers, is turning to investors after Chief Executive Officer Fabrizio Viola, 55, agreed to partially reimburse 4.1 billion euros of state aid next year to win European Union support for its restructuring plan.

--With assistance from Elisa Martinuzzi and Sonia Sirletti in Milan. Editors: Frank Connelly, Alessandra Migliaccio