Today, UniCredit Board of Directors approved a series of measures which will
significantly reinforce its capital position. The plan envisages capital-strengthening
actions for an aggregate amount of up to €6.6 billion. UniCredit estimates that its Core
Tier 1 ratio Basel II (which was 5.7% at the end of June 2008) will reach a level of
around 6.7% by year end, compared with its previous target of 6.2%, as a result of the
combined effect of the capital-strengthening actions being announced today, the
implementation of a series of cost-cutting measures, and the execution of other
extraordinary transactions currently underway or envisaged.
The past three weeks have been extremely challenging for the entire financial sector
resulting in unprecedented volatility and pressure, also on UniCredit shares. In such
scenario, the capital target of 6.7% Core Tier 1 at the end of 2008 is based on
expected Group net earnings of about €5.2 billion, equivalent to approx. €0.39 EPS
prior to the capital increase. The gap versus the previously announced target of €0.52
EPS is attributable both to deteriorated financial markets conditions, which have
affected the performance of market-related activities and to the delay in UniCredit
assets disposal plan.
The capital-strengthening initiatives include:
o
Payment of dividends related to our 2008 earnings in new shares for an expected
aggregate amount of €3.6billion;
o
Placement of a €3billion issue of Core Tier 1 “Convertible Equity Instruments”
(“CASHES” or “instruments”) with a group of institutional investors, the size of
which will be reduced depending on shareholders’ take-up of the rights offering.
As the issuance of the new ordinary shares underlying the instruments must be
approved at a UniCredit Shareholders’ meeting and offered to the current shareholders
on a pre-emptive basis, the UniCredit Board of Directors has resolved to call an
Extraordinary Shareholders’ Meeting in November 2008, with a view to completing the
transaction as soon as practicable within the first quarter 2009, subject to regulatory
approvals. The Extraordinary Shareholders’ Meeting will be asked to approve a capital
increase of 973 million new ordinary shares at a price of €3.083 per share (the
reference price of the shares at the close of the market on the Italian Stock Exchange
on Friday, October 3, 2008), of which €2.583 represents share premium.
To the extent that the shareholders exercise their rights to subscribe for such shares,
the volume of the CASHES to be issued will be reduced pro-rata.
The CASHES are securities that are convertible at the investor’s option into new
UniCredit ordinary shares to be issued following receipt of the necessary
authorizations. The instruments have been priced with a coupon of 3-month Euribor
plus 450bps, in line with terms of recent bank capital financing, and an exchange price
fixed at €3.083, the reference price of the shares at the close of the market on the
Italian Stock Exchange on Friday, October 3, 2008. They will be convertible at any time
after 40 days from their issue date and will be automatically converted into UniCredit
ordinary shares if the UniCredit share price exceeds 150% of the exchange price (
i.e.,
€4.6245) over a set period following the 7
th anniversary of their issuance.
The instruments offering met a significant level of demand; UniCredit core
shareholders and other institutional investors committed to subscribe up to €3 billion, of
which €2 billion already approved by their relevant bodies, while the remaining amount
of €1 billion is expected to obtain such approval in the forthcoming days.
UniCredit Markets & Investment Banking, Mediobanca and Merrill Lynch International
advised on the overall capital strengthening measures, on the structuring of the
instruments and acted as private placement agents of the CASHES. They also have
been mandated to manage the rights offering.
Finally, the Board will propose at the forthcoming Shareholders’ Meeting the
authorization to dispose of the existing treasury shares at market conditions.
A Conference Call will be held tomorrow, Monday, October 6 at 8:00 am CEST.
Speaker: Mr. Alessandro Profumo, CEO
Dial in numbers:
Italy: +39 02 8020911
UK: +44 208 7929750
US: +1 866 2396425
A
presentation will be downloadable on www.unicreditgroup.eu before the beginning
of the conference call
Dial in numbers for the playback of the Conference Call
(available approx. 1 hour after the end of the live Conference Call until Wednesday,
October 8):
Italy: +39 02 80613780
UK: +44 207 1086235
US: +1 866 8489310
Access code for the playback numbers: 742#
Enquiries:
Media Relations:
Tel. +39 02 88628236;
e-mail:
MediaRelations@unicreditgroup.eu
Investor Relations:
Tel. +39 02 88628715;
e-mail: InvestorRelations@unicreditgroup.eu
