June 16, 2017 / 8:02 PM / a month ago

Italy approves emergency decree to delay Veneto Banca bond payment

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ROME, June 16 (Reuters) - The Italian government on Friday approved an emergency decree to allow troubled lender Veneto Banca to avoid a bond repayment which was due on June 21.

Under the decree, banks which have applied for a precautionary recapitalisation, like Veneto Banca, can postpone by six months the repayment of their subordinated bonds from when they requested state aid.

Veneto Banca, like fellow troubled regional lender Banca Popolare di Vicenza, asked for a state bailout on March 17, meaning its bond repayment has been delayed until mid-September, according to the decree approved by the cabinet on Friday.

The move comes as Italy races against the clock to win EU approval for a bail out of the two Veneto-based banks, which together need 6.4 billion euros ($7 billion) in new capital while they try to offload bad debts.

Reporting By Gavin Jones

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