UPDATE 1-Pop Milano says cash call plans not delayed by governance rejection
* Cash call to start in first few days of May
* To pay back 750 mln euro crisis loans to ECB end April
* All ECB crisis loans to be repaid by end 2014 (Recasts lead, adds detail, background)
MILAN, April 16 (Reuters) - Banca Popolare di Milano said on Wednesday rejection of corporate governance reforms by its shareholders over the weekend would not delay plans it has for a capital increase of 500 million euros ($690 million).
On Saturday, shareholders at the cooperative lender unexpectedly voted down reforms designed to attract new investors three weeks before the launch of its cash call.
It was the latest failed attempt to change the bank's governance, which critics say gives too much sway to employee shareholders and unions.
In a statement, the bank said the capital increase would be launched at the beginning of May with a view to strengthening its capital base.
Some of Italy's small and medium-sized banks, which have borne the brunt of Italy's recession, are launching cash calls and selling assets to beef up balance sheets ahead of a sector-wide health check by the European Central Bank.
Pop Milano said in March it was targeting a common equity ratio of around 12 percent in 2016 from 7.1 percent at the end of last year.
The lender also said when the cash call had been completed it would ask the Bank of Italy to remove additional risk-weighting of assets it had imposed on the cooperative bank.
The improved liquidity position would allow it to pay back a further installment of crisis loans to the European Central Bank to the tune of 750 million euros by the end of April, the bank said.
It said the aim was to repay all the crisis loans to the ECB by the end of 2014.
The ECB lent banks more than one trillion euros in three-year loans (LTRO) during the euro zone's debt crisis, in December 2011 and February 2012, to help lenders ride out funding constraints. ($1 = 0.7243 Euros) (Reporting by Stephen Jewkes, editing by Naomi O'Leary and David Evans)