MILAN (Reuters) – The Italian government is working on a plan to hire some 14 billion euros ($ 17.27 billion) of non-performing loans from UniCredit to make a state-owned Monte dei Paschi deal more attractive to the second largest bank in the country, the sources said.
State-owned bad debt manager AMCO is seeking to recover a significant portion of UniCredit’s bad debt, freeing Monte dei Paschi of its high-risk loans, two sources say Reuters, speaking on condition of anonymity as the matter is confidential.
The plan is part of a series of measures prepared by the Treasury to carry out the sale of MPS even if the rifts within the ruling coalition risk bringing down the government.
The Treasury, AMCO and UniCredit declined to comment.
The Treasury aims to have a range of solutions ready by the end of January to address all the complexities of an agreement, including the provision of possible state guarantees to protect the future owner of MPS from around 10 billion euros in lawsuits that are weighing on the bank after decades of mismanagement
The ultimate goal is to have a deal ready for approval at UniCredit’s annual general meeting in April, another source familiar with the matter said.
Reportage by Pamela Barbaglia and Valentina Za; additional reportage by Giuseppe Fonte and Stefano Bernabei in Rome; editing by Sujata Rao