MILAN Jan 7 UniCredit's head on Saturday
expressed surprise the Italian bank's stock slid this week after
the pricing of a cash call and said he looked forward
confidently to Monday when the rights to buy into the 7.5
billion euro capital increase start trading.
Shares in UniCredit have lost 37 percent of their
value in the three trading sessions since Wednesday when it
priced its rights issue at a huge discount.
The shares closed down 11.1 percent at 3.98 euros on Friday,
giving Italy's biggest bank by assets a market capitalisation of
7.7 billion euros, a shade above the total amount of the new
"The market's reaction surprised us a little, although it is
largely due to technical reasons," Chief Executive Federico
Ghizzoni said in comments reported by daily Corriere della Sera.
UniCredit has priced its two-for-one rights issue at 1.943
euros per share. This is equivalent to a 43 percent discount to
the theoretical ex-rights price, a much higher discount than
that offered by peers in recent rights issues.
Traders have said the large discount highlighted concerns by
UniCredit management that there would be scant appetite from
investors for the new shares.
But Ghizzoni blamed the fall in the share price also on
worries about the situation of some European countries and on
decisions awaited at the European Union level.
"We are confidently looking forward to the start of the
rights trading phase," Ghizzoni was quoted as saying.
The market reaction to UniCredit's fundraising plan has
stoked worries about similar operations at other European
lenders, which must plug a 115 billion euro ($146.21 bln)
capital shortfall by the end of June to comply with more
Thirty-one of Europe's banks must detail their capital
plans by Jan. 20, answering a request by regulators aimed at
strengthening lenders' balance sheets in the face of a
deep-seated sovereign debt crisis and a weakening economy.
Ghizzoni said the timing of UniCredit's cash call allowed
the bank to "anticipate a phase in the market that will see many
capital boosting operations."
UniCredit's rights issue, which runs from Monday to Jan. 27,
is guaranteed by a pool of 27 lenders that will take up any
portion of the offer not subscribed.
"What really matters is that UniCredit's 7.5 billion euro
capital increase is a sure thing," Ghizzoni said.
($1 = 0.7865 euros)
(Reporting by Valentina Za; editing by Ron Askew)