Italy

Shareholders in Monte dei Paschi di Siena approved on Sunday a long-awaited bad loan clean-up plan aimed at easing the sale of the state-owned bank to a healthier rival, Reuters reported. Italy has worked for two years on the plan, which gained final approval from the European Central Bank in September and must be completed by Dec. 1. Rome bailed out Monte dei Paschi in 2017, acquiring a 68% stake for 5.4 billion euros ($6.3 billion). To meet conditions agreed at the time with European Union competition authorities, it must cut that stake before the bank approves 2021 earnings.

Italy’s UniCredit SpA has sued Hin Leong Trading Pte Ltd over a letter of credit, court documents show, one of several the Singapore oil trader sought from lenders for oil purchases but used to pay debt instead, Reuters reported. The Singapore High Court documents seen by Reuters show the Italian bank has also sued commodity trading giant Glencore over the matter. A source familiar with the case confirmed the lawsuits had been filed.

After a decade of scandals and multiple bailouts, Banca Monte dei Paschi di Siena SpA is back in the spotlight, Bloomberg News reported in a commentary. This time, the Italian government is shopping around the 1.5 billion-euro ($1.7 billion) lender ahead of a European Union deadline for Rome to exit the bank next year. Loaded with legal risks that dwarf its market value, any investor will be loathe to buy Monte Paschi with those liabilities — not least in the midst of a pandemic. The risk to Italian taxpayers is that Rome offloads its majority stake in the world’s oldest bank at any cost.

Italy, the euro zone’s third largest but most chronically sluggish economy, will soon get a windfall that could transform its fortunes - not necessarily for the better, Reuters reported. As the biggest beneficiary of the European Union’s 750 billion euro ($890 billion) Recovery Fund, Rome believes the cash will help it fix entrenched economic problems and close its decades-old growth gap with the rest of the bloc.

When European Union nations agreed this summer to set up a 750 billion euro economic recovery fund in response to the coronavirus pandemic, a major motivation was to avoid a lasting depression in Italy that could tear apart the euro, The Wall Street Journal reported. For Europe, much now hinges on whether Italy can find a useful way to spend its part of the fund: roughly €200 billion, equivalent to $236.95 billion, in EU grants and cheap loans. Astute investments that lift Italy’s ability to grow could help overcome the country’s quarter-century of stagnation.

Piaggio Aerospace, which entered extraordinary receivership in late 2018, has lined up €30 million ($35.79 million) in new financing, clearing the way for the Italian manufacturer of the Avanti Evo pusher turboprop to fully resume operations and continue the effort to find a buyer, Aviation International News reported. The financing agreement with Banca lfis follows approval from the Italian Ministry of Economic Development and the approval of the Supervisory Committee.

Coronavirus-triggered cash-flow problems could exacerbate long-standing issues for Italian energy retailers, warned Paolo Ghislandi, secretary general at the Italian association of energy wholesalers and traders (AIGET), ICIS reported. This could cause insolvency for smaller retailers, reducing competition in the market. “If regulator ARERA fails to address these issues, energy suppliers will find themselves operating in with an increasingly volatile and risky sector,” he told ICIS.

Intesa Sanpaolo’s victorious battle for rival UBI has sent shockwaves through Italy’s fragile banking sector as financiers try and work out who will be next in an industry ripe for consolidation, Reuters reported. The unsolicited bid, Europe’s largest banking deal in a decade, has set the stage for further mergers in the fragmented sector as pandemic-induced losses mount, adding to lenders’ existing struggles with negative interest rates and the need to adapt to a fast-changing digital world.

UniCredit has sold non-performing loans worth €1.54bn in an effort to reduce its exposure to bad debt, as banks come under pressure to clean up their balance sheets in anticipation of a wave of defaults related to Covid-19, the Financial Times reported. Italy’s largest lender by assets said that the two portfolios of non-performing unsecured loans — made to small and medium-sized enterprises and worth €702m and €840m — had been bought by digital bank illimity, Banca Ifis and a securitisation vehicle managed by digital bank Guber Banca and Barclays.

Atlantia, the infrastructure group controlled by the billionaire Benetton family, has agreed to sell a majority stake in its toll road business following a bitter dispute with the Italian government over the fatal collapse of a Genoa bridge in 2018, the Financial Times reported. Under the terms of the deal, Atlantia will sell at least 51 per cent of its toll road business, Autostrade per l’Italia, to state-owned Italian lender Cassa Depositi e Prestiti, the government said on Wednesday.