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Monte dei Paschi in last ditch attempt to see through capital increase By Reuters

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© Reuters. FILE PHOTO: People pass in front of a branch of Monte dei Paschi di Siena (MPS), the world’s oldest bank, which is facing mass layoffs as part of a planned business merger, in Siena, Italy, August 11, 2021. REUTERS/Jennifer Lorenzini/ image file

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By Valentina Za and Giuseppe Fonte

MILAN (Reuters) – Monte dei Paschi di Siena’s capital raising plan is entering a critical phase with CEO Luigi Lovaglio and banks as the sale is guaranteed in final details, people familiar with the matter said.

MBS, which is 64 percent state-owned after a 2017 bailout, is looking to raise up to 2.5 billion euros ($2.5 billion) by issuing new shares.

The October 17 share sale will allow MPS to raise money to help pay for employee cuts under early retirement rules that expire at the end of November — except for new legislation to extend them.

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To meet the deadline, MPS must agree terms for the share issue at the latest by the middle of next week, two people said.

And before that, you need to secure the support of a group of eight banks that made an initial commitment to dispose of unsold shares.

With markets fearing recession, inflation and war, banks see the deal as too risky to take place without the prior commitment of the core investors.

But so far, only the French insurance company Axa, which sells its products in Italy through branches of MPS, has offered to provide support.

Lovaglio failed to accept a similar offer from another MPS business partner, Anima Holding, because unlike Axa, the Italian asset manager also sought to strengthen the distribution agreement as part of the deal.

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Under the structure the bank group envisages, Anima will provide a collateral obligation that comes before bank guarantees, meaning it will be exposed to more risks, a person familiar with the matter said.

Two people close to the deal said the lenders were expecting Lovaglio to have now secured written commitments from core investors.

Divergent views between the consortium and the CEO on how to proceed mean that it will not be clear until early next week whether the capital increase will go as planned.

Lenders, led by Bank of America (NYSE: NYSE:), Citi, Credit Suisse and Mediobanca (OTC:) could pull out thanks to a provision that subjects the underwriting to positive investor feedback.

With the market value of the MPS equal to less than a tenth of the amount the state-owned bank is looking to raise, the banks are exposed to potential losses on equity remaining on their books, which will initially value a Tuscan bank higher than their healthier peers.

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Under EU state aid rules, the state can cover 64% of the MPS capital increase, based on its stake in the bank generated by the 2017 bailout.

The remaining 36% must come from private hands.

Sources said that Anima and AXA could jointly offer up to at best only 300 million euros, adding that the consortium had hoped to obtain formal pre-commitments from other investors and also spoke of Lovaglio, such as the bank’s small debt holders.

The risk of converting to equity has pushed the price of the MPS mini-bond to nearly half its face value. (1 dollar = 1.0216 euros)

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US basketball star Greiner released from Russian prison in prisoner swap – Biden, Reuters

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© Reuters. On August 4, 2022, American basketball player Brittney Griner, who was detained at Moscow’s Sheremetyevo Airport and later charged with illegal cannabis possession, was escorted before sentencing in Khimki outside Moscow, Russia, on August 4, 2022.

WASHINGTON (Reuters) – U.S. President Joe Biden said on Thursday that basketball star Brittney Grenier was released in a prisoner swap with Russia and is now in U.S. custody.

The Russian Foreign Ministry said it had replaced Griner with Russian citizen Viktor Bout, a former arms dealer. Russian news agencies said the exchange took place at Abu Dhabi airport in the United Arab Emirates.

“She’s safe. She’s on a plane. She’s on her way home,” Biden said in a tweet.

Biden and Vice President Kamala Harris spoke on the phone with Graner from the Oval Office, a US official said, adding that the call included Graner’s wife, Cheryl. The White House released a photo of the phone call.

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The White House said Biden is scheduled to make his remarks at 8:30 a.m. (1330 GMT).

Griner, 32, a star of the Women’s National Basketball Association’s Phoenix Mercury, was arrested on February 17. Talks to secure her release were complicated by Russia’s invasion of Ukraine on February 24 and the subsequent deepening strain in relations between Washington and Moscow.

Greiner, a two-time Olympic gold medalist, was arrested at a Moscow airport when e-cigarette cartridges containing cannabis oil, which is banned in Russia, were found in her luggage.

She was sentenced on August 4 to nine years in a penal colony for drug possession and trafficking. She pleaded guilty, but said she made an “honest mistake” and did not mean to break the law.

Last month, she was transferred to a penal colony in the Russian region of Mordovia to serve her prison sentence.

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Dubbed the “Dealer of Death” and “Penalty Breaker” for his ability to circumvent the arms embargo, the 55-year-old Bute was one of the world’s most wanted men before his arrest.

Over nearly two decades, Bot became the world’s most notorious arms dealer, selling weapons to rogue states, rebel groups, and murderous warlords in Africa, Asia, and South America. For experts of the Russian security services, Moscow’s enduring interest in Bout hints strongly at Russian intelligence ties.

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Stock futures are rising after a five-day losing streak

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The S&P 500 has fallen for eight of the past nine trading days as concerns about a looming recession spooked investors.

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Carvana stock collapses amid bankruptcy fears

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carvana (CVNAShares rose on Wednesday after the online auto retailer’s largest creditors signed an agreement to cooperate in potential restructuring negotiations as the company faces the heightened risk of bankruptcy.

The company’s stock fell about 43% on Wednesday.

Bloomberg News, citing people familiar with the matter, reported tuesday That a group of Carvana’s 10 largest lenders holding about $4 billion in the company’s unsecured debt has entered into a three-month agreement to work together in the event of a restructuring. Creditors included in the report include Apollo Global Management and Pimco. (Disclosure: Apollo Global Management owns Yahoo.)

“Carvana is not involved in any cooperative agreement between bondholders and we will not address any questions arising from actions taken by these bondholders,” a Carvana spokesperson said in a statement to Yahoo Finance. “Our message to our customers, shareholders, employees and other stakeholders remains clear: We are uniquely focused on executing the plan to achieve the profitability outlined in our shareholder letter in our third quarter and have ample liquidity to get us there. In no way does today’s news change that strategy.”

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Pimco and Apollo declined to comment.

Wednesday’s crash in Carvana’s share price also comes as Wedbush analyst Seth Basham downgraded the stock to Underperform and lowered its price target to $1 from $9 after news of the agreement, citing a high risk of bankruptcy for the company.

“This movement [from creditors] It will help avoid the infighting between lenders that has occurred in other recent restructurings,” Basham wrote in a note. “We believe these developments indicate a higher probability of debt restructuring that could leave equity worthless in a bankruptcy scenario.”

Basham is also called Karvana Acquisition of Adesa’s physical auction business Back in May, an “ill-timed” deal, “has an albatross around its neck, not only adding $336 million in additional annual interest expense accrued but also burdening the company with additional renewal capacity it doesn’t need.”

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A used Carvana “vending machine” on May 11, 2022 in Miami, Florida. (Photo by Joe Riedel/Getty Images)

Shares of the beleaguered online car dealer fell below $4 on Wednesday, marking the first time Carvana’s share price has fallen below $5 since the company went public in 2017. Carvana stock is down more than 98% since the start of the year.

Wednesday’s downgrade from Wedbush comes as a slew of Wall Street analysts have downgraded their ratings on the stock in recent months.

Last month, Bank of America downgraded Carvana to neutral due to liquidity concerns and liquidity burn. “We now believe that without a cash injection, Carvana will likely run out of cash by the end of 2023,” Bank of America’s Nat Schindler and Vincent Hubner said in a November 30 note.

earlier in november, Morgan Stanley analysts said The shares could be worth $1 per share amid what they saw as a deterioration in the company’s fundamentals.

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Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet

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