The largest shareholder in Banca Monte dei Paschi di Siena had been in talks with the Italian Treasury regarding the sale of a part of its stake. This was according to two sources that were familiar with the matter.
The Monte dei Paschi foundation is a non-profit entity that has close ties with local politicians. The report went on saying that the current market prices would force the foundation to sell its 12.5% ownership stake in the bank. The foundation needed to pay its debts worth EUR350 million, said the report from Reuters. The foundation currently holds a 33.5% ownership stake in the Italian bank.
The Monte dei Paschi foundation was pressured to complete the sale quickly as the bank needed to carry out a EUR2.5 billion capital increase by the end of next year, said the Reuters report. The move was to meet European Union conditions for the approval of a state bailout for Bance Monte dei Paschi.
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