UniCredit began Italy's biggest corporate share sale today in an attempt to raise €13 billion to rebuild the bank's capital after a balance sheet clean up.
Banks in Italy have been struggling to deal with bad loans left behind by a deep recession, leading to a series of capital raisings and consolidation in the sector as Rome tries to steady confidence in the sector.
UniCredit said last week it will post an €11.8 billion loss for 2016 due to one-off hits stemming mainly from loan writedowns.
This came as it prepared to offload €17.7 billion in bad debts under a restructuring plan outlined in December.
This follows the hiring by Italy's biggest bank by assets of French investment banker Jean Pierre Mustier as its new chief executive in July, with a brief to address long-standing concerns about UniCredit's weak capital base.
As part of the wider restructuring, UniCredit said over the weekend that it had agreed with unions 3,900 lay-offs in Italy as part of its plan to cut 14,000 staff by 2019.
Shareholders who do not exercise their rights face a dilution of their stake of more than 70%. UniCredit said on Friday that none of its shareholders with a stake of at least 3% had yet committed to buy into the share sale.
Its top shareholder is US investment firm Capital Research and Management Company with 6.7%, followed by Abu Dhabi's sovereign wealth fund Aabar and asset manager BlackRock BLK.N with a stake of about 5% each.
Sources told Reuters last month Aabar was set to buy into the share issue.
UniCredit is offering 13 new shares - at a price of €8.09 each - for every five ordinary or savings shares already owned. The price entails a 38% discount to the value of the stock, excluding subscription rights.
