July 29, 2016 / 10:26 AM / a year ago

Monte dei Paschi set to reject UBS-Passera rescue plan - sources

MILAN, July 29 (Reuters) - The board of Italy’s Banca Monte dei Paschi di Siena is set to reject an alternative rescue plan for the troubled lender put forward by veteran Italian banker Corrado Passera and sponsored by UBS, two sources close to the situation said.

“The discussion is still ongoing, but the board is set to reject the proposal,” one of the sources said.

The board of the Tuscan bank was meeting on Friday to approve first-half results and its own rescue plan that envisages a 5 billion euro ($5.56 billion) share issue as well as a 10 billion euro sale of loans the bank granted to borrowers and now deemed insolvent.

A source told Reuters earlier that the alternative plan envisaged a 2.5-3.0 billion euro cash call and the voluntary partial conversion of some of the bank’s subordinated bonds into equity and was backed by some U.S. private equity funds. ($1 = 0.9001 euros) (Reporting by Paola Arosio, writing by Agnieszka Flak)

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