Italy gives green light to Vicenza bank’s $2bn IPO

MILAN / Reuters

Italy’s market regulator gave the green light on Thursday for struggling lender Banca Popolare di Vicenza to list on the Milan stock exchange with a 1.76 billion euros ($2 billion) initial share offer, to be underwritten by a new bank bailout fund.
Popolare di Vicenza, Italy’s eighth-largest lender, needs to raise the money to plug a capital shortfall revealed by the European Central Bank and
ward off the threat of being wound down, following some big losses.
There had been fears that it might fail to raise the money and trigger a crisis of confidence in the euro zone’s fourth-largest banking industry, prompting Rome to orchestrate a bailout fund backed by the country’s big financial institutions.
The Atlante fund – Atlas in English – was born this month and it swiftly agreed to underwrite the IPO to the tune of $1.5 billion, accounting for a major part of the more than 4 billion euros Atlante had raised so far from its own investors.
The fund also aims to support other struggling lenders if they too face a funding crisis in the months ahead.
Popolare di Vicenza said its initial public offering would run from April 21 to April 28. Twenty-five percent of the offer would be set aside for retail investors while the rest would be offered to institutional investors in Italy and abroad.
The bank has set an unusually wide range of 0.10 to 3 euros per share for its IPO, saying this week that investor interest during the pre-marketing phase was too weak to be more precise.
Only a year ago, the bank sold shares at 48 euros apiece to many of its own customers in marketing exercises that are now being probed in its hometown of Vicenza in northern Italy. In 2014, it was selling its shares for as much as 62.5 euros each.
Italian banking shares have lost 30 percent this year due to concerns about the sector’s high levels of soured loans.