MILAN Italy's biggest bank UniCredit (CRDI.MI) said on Saturday it had signed a deal with trade unions to cut 3,900 jobs in the country as it prepares to launch a record 13 billion euro ($14 billion) share issue next week.
A total of 14,000 job cuts by 2019 are key to a business plan unveiled in December by UniCredit's new chief executive, Jean Pierre Mustier, to bolster the bank's balance sheet. The plan also includes the proposed sale of 17.7 billion euros in bad debts.
UniCredit has said it will book one-off restructuring costs of 1.7 billion euros in the fourth quarter to cut a total of 5,600 jobs.
"With the agreement defined today, the negotiations with the trade unions in the affected countries (Italy, Germany, Austria) have been completed," the bank said in a statement. "(The plan's) targets are confirmed."
The cuts in Italy will be carried out on a voluntary basis and UniCredit has committed to hiring 1,300 people over the next three years.
"It's a good accord which paves the way for the capital increase," said Massimo Masi, secretary general at the UILCA bank workers' union.
To offset fourth-quarter losses stemming mainly from 8.1 billion euros in loan writedowns, UniCredit will sell new shares starting from Monday in Italy's biggest ever corporate cash call.
In a document published on Friday, UniCredit said it was not aware that anyone planned to take on more than 5 percent of the share offer.
It added that none of its shareholders with a stake of at least 3 percent had yet committed to exercise their rights to buy new shares and avoid dilution.
UniCredit's top shareholder is U.S. investment firm Capital Research and Management Company with 6.7 percent, followed by Abu Dhabi's sovereign wealth fund Aabar and asset manager BlackRock (BLK.N) with a stake of about 5 percent each.
($1 = 0.9276 euros)
(Reporting by Valentina Za; Editing by Helen Popper)