Italy's Banco Desio rescues Popolare Spoleto in 140 mln euro deal
MILAN, April 2
MILAN, April 2 (Reuters) - Small Italian bank Banco di Desio e della Brianza will invest 139.75 million euros ($193 million) to rescue rival Banca Popolare di Spoleto, one of around a dozen struggling lenders put under special administration by the central bank.
Bank of Italy officials have been running Popolare Spoleto for more than a year, following an inspection that unveiled "serious irregularities and large expected capital losses".
Lombardy-based Banco Desio said in a statement late on Tuesday it would acquire a stake of between 66.8 and 72.2 percent in Popolare Spoleto, located in the central Italian Umbria region, by buying into a reserved rights issue.
"The capital increase, financed through own resources, will rebuild Popolare Spoleto's regulatory capital ... and allow it to name new management," Banco Desio said.
The share sale is expected to be completed by July and Popolare Spoleto should name a new board by September.
Banco Desio said it ruled out the need to raise fresh capital following the investment as its capital ratios remained more than adequate to regulatory requirements.($1 = 0.7249 Euros) (Reporting by Valentina Za; Editing by Kim Coghill)