The MPS board will meet today to review and approve the agreement. Credit: aymane jdidi from Pixabay.

Banca Monte Dei Paschi di Siena (MPS) is set to go ahead with the planned €2.5bn share sale, Bloomberg reported, citing an unnamed source. 

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.  

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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. 

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MPS has held talks with French insurance major AXA and asset manager Anima for their participation in the capital raise. 

As per Reuters’ earlier report, AXA could invest up to €150m in the bank. 

Several lenders have signed a pre-underwriting agreement, which is subject to market conditions and investor feedback.

These include Bank of America, Mediobanca, Citigroup and Credit Suisse Group, Banco Santander, Barclays, Societe Generale and Stifel Europe Bank. 

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.