Milan-based investment bank Banca Profilo has announced a capital injection from private equity firm Sator that will boost the bank’s share capital by up to EUR110m and give Sator major
Milan-based investment bank Banca Profilo has announced a capital injection from private equity firm Sator that will boost the bank’s share capital by up to EUR110m and give Sator majority ownership.
The deal recapitalises the bank after it lost EUR74m last year.
Banca Profilo’s board of directors has approved the preliminary results for the year 2008 which report a loss of EUR74m. It says this result owes much to the turbulent financial market conditions in the final quarter of 2008 and adjustments to investments and provisions accrued.
The board has acted upon the recommendations issued by the Bank of Italy in relation to assuring maximum transparency in the preparation of bank financial statements in the current difficult market conditions and adopted, in accordance with these recommendations, all the measures necessary for the recapitalisation of the bank, which have taken place on the market and without recourse to any State aid.
In this context, the board of directors approved a wider restructuring plan of the bank’s activities, reviewing the business model and focusing on the private banking sector – a move encouraged also by the insertion of Sator’s management resources.
The agreement signed provides for a share capital increase of the bank up to EUR110m, increasing the core Tier I capital ratio of the bank up to approximately 13 per cent.
The agreement between the principal shareholders of Profilo and the Sator private equity fund is intended to guarantee management, personnel and all stakeholders of the bank a solid and stable shareholder base, a sound financial structure and provide the bank a new strategic footprint, which will strengthen the business in the medium-long term period.
Sator, as majority shareholder, will appoint the senior management of the bank in order to integrate the current management team which has overseen the creation and development of Banca Profilo.
After the completion of the share capital increase, the majority of the directors will be appointed by Sator; the current principal shareholders will have the right to appoint two or three directors.
The agreement is subject to the authorisation by the Bank of Italy, the Antitrust Authority and Swiss banking authorities of the 60 per cent investment held in Société Bancaire Privée of Geneva, and to the exemption, by Consob, of the obligation to launch a public tender purchase pursuant to article 106 of the TUF (Consolidated Finance Act ) and also to the favourable opinion of the audit firm on the correctness of the issue price of the share capital increase.
The operation is also subject to the normal due diligence clauses and the normal contractual clauses in similar operations.
