The troubled Italian bank is close to reaching an agreement with banks arranging the deal, the source said, adding that the MPS board of directors are set to meet on 11 October to approve the terms of the share sale.
MPS representatives and Italian government authorities declined to comment on the development.
As per the report, MPS CEO Luigi Lovaglio and the Italian Treasury made last-ditch efforts to raise funds from a range of investors and onboard banks to go ahead with the share sale.
Based on the Italian finance ministry’s stake in the bank, it will subscribe to 64% of the proposed share sale.
Sources aware of the development said last month that Lovaglio has been trying to convince financial institutions, MPS partners and Italian banking entities to invest in the share sale.
Several lenders have signed a pre-underwriting agreement, which is subject to market conditions and investor feedback.
Last week, media reports emerged that MPS plans to divest assets worth up to €400m as part of the new agreement between Rome and the European Union.
The new share sale is slated to launch on 17 October 2022.