Italy’s Treasury is discussing with European Union authorities the possibility of extending by more than two years a 2021 deadline to cut Rome’s 64% stake in ailing bank Monte dei Paschi di Siena, two sources told Reuters.
Under the terms of a 5.4 billion euro ($6.12 billion) state bailout agreed with Brussels in 2017, Italy was supposed to have a deal in place by the end of this year to re-privatise MPS, but this has not proved possible.
The extension being sought will be “more than two years,” one of the sources said. This was confirmed by a second source familiar with the matter.
Shares in MPS jumped almost 17% on Wednesday, with traders saying the Treasury-led restructuring could make the lender more appealing for a potential partner.
In a further boost on Wednesday, ratings agency Fitch removed a negative rating watch on the bank.
Both sources said the Treasury would make every effort to keep the new deadline confidential, in order to avoid the risk that potential buyers wait until it is looming to table an offer when the government is under pressure.
However, the extension will largely cover the timeline of MPS’ new industrial plan ending in 2025, provided the EU competition authorities authorise it.
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