Italian lender UniCredit is likely to launch a €5 billion rights issue early 2012 to meet tougher European capital rules, Reuters reports. The firm’s top shareholders, including 5 percent-owner and Abu Dhabi–backed International Petroleum Investment Co. and Italian regional foundations controlling 8.66 percent, are expected to support the move.
The Chinese investors who own approximately 0.4 percent of the company may also take up rights and boost their investment with the fundraising. The UniCredit management, still exploring options, has not picked financial advisers yet. The lender is required to fill a €7.3 billion equity gap, which could shrink significantly if it is allowed to count €3 billion of convertible notes as core capital. In order to cut costs, the lender may scale back its corporate finance business, sell U.S. dollar-denominated debt portfolios and some selected non-core assets.
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