December 22, 2016 / 8:06 PM / 2 years ago

Monte dei Paschi says capital increase failed

MILAN, Dec 22 (Reuters) - Monte dei Paschi di Siena said on Thursday its plan to raise 5 billion euros ($5.2 billion) of fresh capital had failed, paving the way for Italy to approve a state bailout of the country’s third-largest bank.

Monte dei Paschi said a failure to find cornerstone investors and sell new shares meant that it also had scrapped a debt-to-equity conversion offer that had raised 2 billion euros in capital.

It said it was returning bonds tendered under the swap.

The Tuscan bank said it would not pay any fees to the investment banks that had worked to place its shares or on its planned bad loan sale, including its advisers JPMorgan and Mediobanca.

The bad loan sale could not go ahead as the bank failed to raise the money it needed to cover losses from loan writedowns.

$1 = 0.9583 euros Reporting by Valentina Za; Editing by Crispian Balmer

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