Bloomberg News

Libya Funds for UniCredit Rights Said to Be Released by Italy

December 16, 2011

Dec. 15 (Bloomberg) -- The Italian government will release about 375 million euros ($490 million) of frozen assets owned by Libya’s central bank to allow the institution to buy shares of UniCredit SpA, according to two people familiar with the plan.

The Italian government’s financial security committee approved allowing the Central Bank of Libya to participate in UniCredit’s rights offering to maintain its 5 percent stake in the lender, according to the people, who asked to not be identified because the decision isn’t public.

UniCredit plans to sell 7.5 billion euros of shares in January after the European Banking authority urged the bank to boost capital. Chief Executive Officer Federico Ghizzoni is cutting costs and reducing headcount to strengthen the bank’s finances and improve profitability.

Assets owned by Libya’s central bank and sovereign wealth fund were frozen by the European Union, U.K. and U.S. as part of their effort to cut off deceased Libyan leader Muammar Qaddafi’s access to funding during the nation’s civil war. The 2.6 percent stake in UniCredit held by the Libya Investment Authority, a fund linked to Qaddafi’s family, will stay frozen.

UniCredit investors are meeting in Rome to approve the share sale today. The rights offering “cannot be avoided” given regulators are insisting that “all banks have sufficient liquidity,” Chairman Dieter Rampl told the shareholders.

A representative of Fondazione Cariverona, which owns 4.2 percent of the bank, called for a “serious analysis” of why the bank was forced to raise capital. He didn’t give his name. Cariverona will vote in favor of the bank’s planned stock sale, the representative said.

--With assistance by Elisa Martinuzzi in Milan. Editors: Keith Campbell, Dan Liefgreen.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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