Trading in UniCredit, Italy's largest bank, was suspended again earlier today after shares tumbled further in the wake of a heavily-discounted share offering.
UniCredit shares dropped some 10% this morning before trading was halted with shares priced at €4.86. The shares eventually closed down 17.3%, after a drop of over 14% yesterday.
This followed the news Unicredit would sell shares in the capital increase beginning on January 9 at €1.943 each - a 43% discount from their theoretical fair value.
The aim of UniCredit's rights issue is to help the bank shore up its capital reserves, in line with European regulatory demands. Last month, industry regulator, the European Banking Authority, said the bank needed to raise around €8 billion.
UniCredit's chief executive Federico Ghizzoni told Il Sole 24 Ore newspaper he was confident the market would underwrite nearly all of the rights issue and that such a "technical reaction" was expected. He said he was "optimistic" that the capital increase would be successful.
