Bond, capital, unions. All the grits of Mps
Here are the latest (not positive) news for Mps. Facts, numbers and analysis
A thud for the subordinated bonds of MPS, which discount the uncertainty about the bank's destinies, while the shares in Piazza Affari, also thanks to the low free float, remain little moved (+ 0.3%) pending clarity on the fate of the bank of Siena now controlled by the Ministry of Economy
At the end of last week, rumors emerged on the fact that the Treasury, in order to incentivize Unicredit to take the Monte, would be preparing a capital increase of more than 5 billion euros, pressed by the requests of the CEO of Unicredit, Andrea Orcel, who would even like seven.
Due to the protracted negotiations with Unicredit, as reported by Il Messaggero on Sunday, the Mef is negotiating with the EU a six-month extension, until June 2022, of the deadline for the sale of Mps, which would be added to the possible extension, also for six months, fiscal incentives for bank mergers.
The Mef does not comment on the rumors while the uncertainty about the fate of Mps is paid for by subordinates, securities that risk burden sharing in the event of public aid. The 750 million bond maturing in 2028 loses 6.6%, the 300 million bond maturing in 2029 sinks by 6.9%, the 400 million bond maturing in 2030 loses 7% while the 300 million bond, again with maturity 2030, slips by 6.4%.
THE COMPLAINT BY THE TRADE UNIONS AGAINST MPS
But there is not only the capital increase and the bond dossier amidst the tribulations of the Sienese institute. In fact, there was a complaint for anti-union behavior against Banca Mps. It is the one filed today at the labor court of Siena by the trade unions Fabi , First Cisl, Fisac Cgil, Uilca and Unisin. This was reported by the same unions who explained in a note: the bank “has launched three procedures that have a strong impact on the workers and on the organization of the bank”.
In particular, the unions explain in the note, the bank "gave rise to a ten-year secondment operation involving about 300 colleagues without putting us in a position to make our assessments and observations, through the definition of a 'network contract', up to now never used within the Mps Group, which can open dark horizons for the management of personnel and redundancies ". “It has also initiated two other procedures, branch closure and corporate world reorganization, relating to an Industrial Plan never approved by Europe, without giving us a call date”, add the unions who underline: “The bank has left us no other choice”. The complaint "is a serious act, which we have pondered for a long time and which until recently we would never have thought of arriving, but it is a duty" concludes the note.
MPS CAPITAL INCREASE: ESTIMATES, RUMORS AND EFFECTS
But what do the analyzes of the capital increase think? A 'jumbo' recapitalization of Mps, such as the one the Treasury seems to be working on, will benefit the Unicredit buyer. "The larger the size of the increase, the better it will be for Unicredit shareholders as it would translate into greater coverage of the risk and future restructuring costs", commented Exane Bnp analysts, inviting investors to buy the shares of the company. Andrea Orcel's bank ahead of the possible announcement. For Bestinver Securities the risk of a maxi-hike “is basically the reason we have a 'sell' rating on Mps and a valuation price range that is 'insignificant'. The capital increase, which we believe will be very dilutive, will wipe out all minorities ”, analysts explain. Exane considers the possible extension of six months of the deadline assigned by the EU to the Treasury to sell Mps "a pure technical detail" that "will not necessarily impact the timing" of the operation, the announcement of which is expected "by October 28" when Unicredit will disclose the results for the third quarter. Even the six-month extension of the tax benefits on the mergers "is logical" as it is "unlikely" that the transaction will be completed by the end of the year and the approximately 2 billion tax benefits "are an important piece of the puzzle in order to achieve a neutral transaction for the capital of Unicredit ".
THE POINT OF THE REUTERS
The conditions imposed by UniCredit on the Treasury to acquire a large part of Banca Mps require the state to recapitalize the Tuscan bank for well over 7 billion euros, according to two sources familiar with the dossier, wrote the Reuters agency : "UniCredit has accepted a July to negotiate with the Ministry of Economy on Mps on condition that the transaction has no impact on the capital ratios and ensures a growth in earnings per share of at least 10% ".
Mps is under public control after the 2017 bailout costing 5.4 billion to taxpayers and the Treasury aims to present a privatization plan to the European authorities at the end of the year with the aim of actually leaving the Sienese institution at the latest within the deadline. agreed in mid-2022; "The parties are always working to close a preliminary agreement in time for the UniCredit board of directors on October 27 on the results of the nine months, but a source close to the negotiation does not rule out that it may take longer given the complexity of the negotiations," added Reuters .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/bond-capitale-sindacati-tutte-le-grane-di-mps/ on Mon, 18 Oct 2021 13:21:02 +0000.