Struggling lender Banca Carige is set to receive up to €400m ($451m) from domestic peers and private investors.

The move will help the bank to fulfil the European Central Bank (ECB) year-end deadline to strengthen its capital, reported Reuters.

The Banca Carige capital raising plan

In a statement, the bank said that it will issue a subordinated convertible bond for between €320m and €400m.

It added that other Italian banks will purchase bonds worth €320m. Another €80m will be reserved for private investors which may include existing shareholders.

The overall process will be executed through a part of Italy’s depositors’ guarantee fund called Voluntary Scheme.

Following the announcement, all Carige’s shares and bonds were suspended from trading.

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Banca Carige, which has been struggling with bad debts, carried out its last capital raising in December last year. Since 2014, it has raised €2.2bn in capital.

The bank also went through multiple management changes in the recent years. In September this year, former UBS banker Fabio Innocenzi was appointed as its CEO.

Banca Carige is also considering a possible merger, which in turn will extend ECB’s year-end deadline. It has appointed UBS to assess potential tie-ups.

Recently, top Italian banks were reported to have offered $3bn credit line to the country’s interbank deposit protection fund (FITD).

FITD is used to safeguard deposits below €100,000 in case of bank failures.