MILAN, Feb 5 (Reuters) - The charitable foundation that used to control Italy’s Monte dei Paschi di Siena expects to see its 2.5 percent stake “drastically” reduced, the foundation’s president told an Italian newspaper.
Monte dei Paschi must plug a capital shortfall after it fared poorly in a review of euro zone lenders carried out last year by European authorities.
Marcello Clarich told Il Sole 24 Ore daily in an interview that the prospect of a cash call, whose size is yet to be determined, and the possibility of a merger after that, meant the foundation’s 2.5 percent stake would drop significantly.
“Concerning the upcoming capital increase at Monte dei Paschi, we’ll assess our position in due time but we must diversify the risks (of our assets) and secure an income that allows the foundation to perform its role,” Clarich said.
He said the foundation had 400 million euros in cash and would try to “preserve the bank’s local ties” but “within reason”.
Like other Italian banking foundations, which are not-for-profit entities with strong local ties, the Monte Paschi shareholder has tied its fortunes to those of the bank. It has seen its holding progressively reduced as the crisis-stricken lender kept tapping investors for more funds.
Clarich praised the bank’s current Chief Executive Fabrizio Viola and Chairman Alessandro Profumo ahead of a shareholder meeting in the spring that must name a new board.
“During a storm you don’t change the person who holds the rudder,” he said.
Clarich said the foundation was working with co-shareholders Fintech Advisory and BTG Pactual, which together control 6.5 percent of Monte Paschi, on a slate of candidates for the board.
The foundation has sealed a shareholder pact with U.S. based fund Fintech, controlled by Mexican billionaire David Martinez, and Brazilian investment bank BTG.
It allows the foundation to propose its own candidate to be the bank’s chairman and for the other shareholders two to pick the chief executive in the joint list of board nominees. (Reporting by Valentina Za; editing by David Clarke)