Monte Paschi proceeds with capital plan to avoid state rescue

Milan

BANCA Monte dei Paschi di Siena SpA will step up efforts to win investors for a debt-for-equity swap over coming days, pressing ahead with a five billion euro (S$7.6 billion) capital call to avoid a state rescue that would impose losses on bondholders and shareholders.

The company's board met on Sunday and agreed to stick with the overhaul's existing timeframe after it had requested an extension to the year-end deadline from the European Central Bank (ECB), the lender said in a statement. A stock sale to investors that have signalled interest will follow the debt swap, though banks haven't committed to underwriting the offer, Paschi said.