In a letter from the Italian Economic Ministry sent last week, the government has asked Banca Monte dei Paschi di Siena to remove the current 4% ceiling on voting rights by the end of July. Should the bank fail to comply, the government says the bank would be at risk to violate European rules on bailout funds.
The said advice was published on the website of the lending institution last Monday. The bank is Italy's third largest financial institution and during the height of the Euro debt crisis, had received Eur4.1 billion in state loans.
In response, Banca Monte dei Paschi said that it would undertake a shareholder's meeting in order to reach a vote on the removal of the cap on voting rights. The bank did not explain why the government requested the removal of such voting rights cap.
The said shareholders meeting would be conducted on July 18 and 19, in the first and second convocation in succession.
Should the voting cap be removed, it would allow CEO Fabrizio Viola and Chairman Alessandro Profumo to attract more investors for its planned Eur1 billion capital increase said to be sourced from the private sector.
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