July 29 (Reuters) -
A last-minute rescue plan for Monte dei Paschi di Siena proposed by Swiss bank UBS includes a smaller capital increase than one currently envisaged by the troubled Italian bank, financial daily Il Sole 24 Ore said.
The statement came on the eve of results of European bank stress tests which are expected to show that the 544-year-old Monte dei Paschi needs to shed a mountain of bad debts and raise several billions of euros in fresh equity to survive.
The UBS plan proposes a cash call of between 2.5 billion to 3 billion euros ($2.77 billion -$3.33 billion), a partial conversion of Additional tier 1 subordinated bonds into shares and a revision of how the bank manages its liabilities, the paper said.
It also proposes that Corrado Passera, a former Italian industry minister and also a former chief of Italy’s biggest retail bank Intesa Sanpaolo becoming Monte dei Paschi’s new CEO, the paper said.
The original rescue plan being put together by Monte dei Paschi and its advisers JPMorgan and Mediobanca included a capital increase of 5 billion euros, sources have said.
According to La Repubblica, U.S. private equity funds would play a significant role in the UBS plan, the paper said without giving details.
According to Corriere della Sera, UBS would guarantee a large part of the operation, but the Swiss bank would not play any direct role in the buyout of the bank ($1 = 0.9016 euros) (Reporting by Agnieszka Flak)