# Monte dei Paschi’s cash call 93% covered so far despite low shareholder take-up Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-31 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Italy's Monte dei Paschi di Siena Capital Increase: Meta Description: Discover how MPS successfully covered its 2.5 billion euro capital increase with investor accords. Stay updated with Reuters for more details. URL: https://financedigest.com/monte-dei-paschis-cash-call-93-covered-so-far-despite-low-shareholder-take-uphtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-31t170409z1lynxmpei9u0olrtroptp4monte-dei-paschi-results-1736814945615-compressed.jpg) 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](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low") 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](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025") from existing shareholders. However, it added it had placed another 475 [million euros’](https://www.financedigest.com/amazon-grants-1-5-million-euros-to-dutch-seaweed-farm-project.html "Amazon grants 1.5 million euros to Dutch seaweed farm project") 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](https://www.financedigest.com/bank-funding-for-renewables-stagnates-vs-oil-and-gas-report.html "Bank funding for renewables stagnates vs oil and gas – report") 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](https://www.financedigest.com/unicredit-gets-ecbs-green-light-for-second-1-billion-euro-share-buyback.html "UniCredit gets ECB’s green light for second 1 billion euro share buyback"), 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](https://www.financedigest.com/iag-agrees-to-buy-80-stake-in-air-europa-for-400-million-euros.html "IAG agrees to buy 80% stake in Air Europa for 400 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](https://www.financedigest.com/how-banks-can-triumph-in-the-new-normal.html "HOW BANKS CAN TRIUMPH IN THE ‘NEW 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](https://www.financedigest.com/wizz-air-loses-fight-against-67-million-in-state-aid-for-romanian-rival.html "Wizz Air loses fight against million in state aid for Romanian rival"). 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](https://www.financedigest.com/liverpool-shines-as-one-of-uks-leading-ladies-for-house-price-growth.html "Liverpool shines as one of UK’s leading ladies for house price growth") as soon as they start trading. ($1 = 1.0117 euros) (Reporting by Valentina ZaEditing by Keith Weir and David Evans) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---