Monte Paschi Foundation agrees new debt repayment deadline

An agreement between Monte dei Paschi di Siena (MPS) Foundation, the controlling shareholder of Italian third largest bank Banca Monte dei Paschi di Siena, and its creditors on the repayment of the €1bn debts owed by the institution has been postponed to May 15.

The agreement has been reached to allow the Foundation more time to find a feasible repayment plan. Initially scheduled in March, the ‘standstill’ agreement between MPS and the 11-bank creditor consortium headed by JP Morgan, Credit Suisse and Mediobanca had been already postponed to April 30.

The main discussion is over the allocation of €350m debt repayments between the 11 banks, with the remaining €650m of debt due to be paid by the initial deadline.

To meet the April 30 deadline, the Foundation announced in March the decision to reduce its 49% stake in the Tuscan bank. So far, MPS has sold a 13% stake, which still allows it to keep its power of veto on the board.

During the bank’s annual meeting on April 27, shareholders confirmed the appointment of Alessandro Profumo as chairman of the bank, with Fabrizio Viola set to become chief executive (http://www.investmenteurope.net/investment-europe/news/2162170/profumo-wins-key-backing-job-mps-bank).

Profumo, who was chief executive of UniCredit, Italy’s largest bank, until September 2010, will be tasked with the restructuring of the bank’s debt. In an interview with Italian newspaper Il Sole 24 Ore, the newly appointed chairman unveiled a “project 2020”, a plan to relaunch the institution and make it one of the top Italian banks.

 

 

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