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Monte dei Paschi shareholders approve $5.3 billion capital boost

Staff Writer |
Shareholders in Monte dei Paschi di Siena approved a 5 billion euro ($5.3 billion) share issue to keep Italy's third-biggest lender afloat.

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Monte dei Paschi di Siena, the world's oldest still in business, needs to raise more than seven times its market value in cash in order to sell bad loans and boost capital after industry stress tests in July singled it out as Europe's weakest.

CEO Marco Morelli told shareholders he had showcased the bank's rescue plan to more than 250 investors in the 70 days since taking office, but had failed to obtain any firm backing.

Morelli is aiming to raise the money this year to cover losses from the planned sale of 28 billion euros in gross bad loans.

If the plan falls through, Monte dei Paschi would need state support to survive.

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