MILAN, June 9 (Reuters) - The top investor in Banca Carige plans to sell 10.9 percent of the Italian mid-sized bank by Tuesday, a source close to the matter said, ahead of a planned 800 million euro ($1 billion) share sale needed to boost the lender’s capital base.
The cash-strapped banking foundation, which until recently controlled almost half of Carige, had struggled last month to sell an 11 percent stake in the scandal-hit lender, sending its shares down 17 percent.
The foundation still owns nearly 30 percent of the bank and wants to lower its stake to 19 percent ahead of the cash call, which is expected to start next week.
The not-for-profit entity forced a delay in the rights issue as it had no money to invest in it and hoped to find friendly investors to buy part of its holding.
“The sale will not be carried out on the market. The foundation, with help from its adviser, will select some buyers and negotiate with them the sale of the stake,” the source said.
Fondazione Carige declined to comment.
In May the foundation had to offer a larger-than-planned 20 percent discount to sell 11 percent of the Genoa-based bank on the market. It had initially targeted selling 15 percent.
Traders said rising risk-aversion ahead of last month’s European parliamentary elections and concerns about the quality of the asset had weighed on the sale.
Shares in Carige, whose long-standing former chairman is under house arrest in a investigation into alleged fraud, lost 3 percent by 1332 GMT. Italy’s banking index was down 1 percent.
The foundation is hoping to raise enough to be able to buy into the rights issue and keep its stake at 19 percent. Its board is set to meet later this week to decide on the matter.
Analysts expect Carige to offer a discount of between 30 and 40 percent on the new shares as it strives to bring its core capital above a minimum 8 percent threshold set by the European Central Bank, in a review of banks across the euro zone this year.
Bigger rival Monte dei Paschi di Siena on Monday launched a 5 billion euro cash call, pricing new shares with a 35.5 percent discount to the theoretical price of the stock when excluding subscription rights.
Carige posted a 2013 net loss of 1.76 billion euros, hit by loan-loss provisions and writedowns on the value of past acquisitions in a balance-sheet clean-up under new management.
Giovanni Berneschi, ousted as the bank’s chairman in 2013, was arrested last month along with six others on suspicion they had forced the bank’s insurance unit to buy assets at an inflated price for their own profit, prosecutors said.
$1 = 0.7345 Euros Writing by Valentina Za; Editing by Paola Arosio and David Holmes