Struggling Italian bank Monte dei Paschi di Siena will stick to its initial plan to seek funds from its investors, after a private rescue attempt fell through in the wake of last week’s referendum.
In a statement released on Sunday, the bank confirmed that it attempt to raise money by issuing new shares to its investors as outlined originally back in October.
The bank had attempted a private rescue plan and was in talks with Qatar Investment Authority, which broke down after the resignation of Prime Minister Matteo Renzi last week. The bank had sought a three-week extension in order to seal a private sector deal, but the request was reportedly refused by the European Central Bank. According to Reuters, the ECB’s supervisory board believed Rome needed to act now and extending the deadline would promote further uncertainty.
The bank raised €1 billion from institutional investors last week through the issuing of new shares and the offer will now be extended to retail investors, if the Italian market watchdog Consob approves.
The government has also added that should the plan fail, it will be prepared to intervene and bail the bank out.
The rescue efforts take place against a difficult political backdrop, after Prime Minister Matteo Renzi resigned last Sunday after losing a referendum on constitutional reform. Over the weekend he was replaced by the Foreign Minister Paolo Gentiloni, an ally of Renzi’s from the same Democratic Party.