Finance
Monte dei Paschi’s cash call 93% covered so far despite low shareholder take-up
Published by Jessica Weisman-Pitts
Posted on October 31, 2022
2 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 31, 2022
2 min readLast updated: February 3, 2026
By Valentina Za
MILAN (Reuters) -Italy’s Monte dei Paschi di Siena said its up to 2.5 billion euro ($2.5 billion) capital increase had been 93% covered so far thanks to accords with investors that offset in part a low take-up by the bank’s shareholders.
Monday was the last day for shareholders in the world’s oldest bank to exercise rights to buy into its seventh cash call in 14 years.
When excluding the state, which contributed 1.6 billion euros towards the capital raising based on its 64% stake, shareholders only took it up for another 10%, Monte dei Paschi (MPS) said.
MPS said it had raised a total of 1.847 billion euros from existing shareholders.
However, it added it had placed another 475 million euros’ worth of new shares with investors who had signed binding sub-underwriting accords.
These investors include MPS’ insurance partner AXA, holders of the bank’s junior bonds such as funds Pimco, Melqart and BlueBay, plus several Italian banking foundations, which are under Treasury oversight and have been urged to help out.
Taking into account these commitments, MPS said it could count on a total of 2.3 billion euros, a figure which could further rise in the following two days.
Unexercised rights will be sold on the Milan bourse on Tuesday and Wednesday, and that is expected to further reduce the amount underwriters will be saddled with below 100 million euros.
The group of eight banks plus London-based fund Algebris that have agreed to back the capital raising will pocket much higher than normal fees to offset likely losses on the new shares.
The have also demanded that MPS struck sub-underwriting accords covering at least half of the 900 million euro portion of the share sale that had to be financed by private investors due to European Union rules on state aid.
Given its shrunken market value in relation to the size of the cash call, MPS has been forced to price the new shares above the multiples at which healthier peers trade, leading analysts to expect a drop in price as soon as they start trading.
($1 = 1.0117 euros)
(Reporting by Valentina ZaEditing by Keith Weir and David Evans)
A capital increase is when a company raises additional funds by issuing new shares or securities to investors, often to improve its financial stability or fund growth initiatives.
Equity investment involves purchasing shares of a company, giving investors ownership stakes. It can provide dividends and capital appreciation based on the company's performance.
A share price is the amount of money required to purchase a single share of a company's stock. It fluctuates based on market demand and company performance.
Market capitalization is the total market value of a company's outstanding shares, calculated by multiplying the share price by the total number of shares.
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