Italian trust fund launches sale of loss-making Carige
MILAN (Reuters) – The Italian Depositary Protection Fund (FITD) has opened Banca Carige’s books to potential suitors in an attempt to end the bank’s woes by selling it after rescuing it in 2019, said three sources familiar with the matter.
Three years ago, Italian banks injected € 600m into Genoa-based Carige via the FITD fund, which acquired an 80% stake, valued at just € 104m.
Carige, Monte dei Paschi’s biggest rival and southern bank Popolare di Bari, are the three main issues that Italian banks still need to address to complete the industry restructuring it started in late 2015.
Banco BPM and Credem signed Non-Disclosure Agreements (NDAs) to access Carige’s books, the sources said. Banco BPM and Credem declined to comment.
Credem typically targets players smaller than Carige for targeted acquisitions, while Banco BPM was looking for a large merger deal and Carige wouldn’t do the trick, bankers said.
Other banks, including BPER Banca and Crédit Agricole Italia, are widely seen as potentially interested in reviewing the data. Private equity funds might also take a look, according to bankers.
The FITD, funded by contributions from Italian banks, expects to receive non-binding offers by July and binding offers in the fall to complete the sale by the end of the year, the sources said.
Carige needs a new buyer after unlisted Cassa Centrale Banca (CCB) decided in March not to exercise an option to buy FITD’s 80% stake.
Italian media reported that CCB had offered to buy Carige for a symbolic price of 1 euro on condition that the FITD fund injects 500 million euros in capital, which the fund rejected.
Analysts predict further losses are looming for FITD in a sale of Carige, which is heavily exposed to the weak economy in the northwestern Liguria region and is not expected to break even until 2023.
“We can say that the process would result in higher systemic fees for the system, as all Italian banks foot the bill for the losses incurred by the FITD,” Mediobanca Securities said in a note.
Analysts say legal risks that complicate a deal hang over Carige due to a lawsuit by a former high-profile investor, as well as its weakened franchise, which has undergone restructuring but where costs still consume virtually all of the money. income.
But the tax incentives offered to promote mergers mean that a buyer could potentially benefit from around € 400 million in capital tax credits under a merger deal.
Deutsche Bank advises the FITD fund on the sale.
Reporting by Andrea Mandalà and Valentina Za; edited by Jane Merriman