MILAN (Reuters) -A pool of banks will have to buy shares worth almost 600 million euros in Saipem after a cash call by the Italian energy services firm fell short of the 2 billion euro target it was seeking from investors to shore-up its finances.
Saipem on Thursday said it sold further new shares worth just 12.4 million euros ($12.41 million) following an auction of unexercised rights, after raising an initial 1.4 billion euros, or 70% of the targeted amount.
The final take-up for the cash call rises to 70.4%, leaving banks with shares worth around 592 million euros to buy, Saipem said in a statement.
Investors bought new shares for only a tiny fraction of those represented by the unexercised rights auctioned earlier this week.
BNP Paribas (EPA:BNPP), Citigroup (NYSE:C), Deutsche Bank (ETR:DBKGn), HSBC, Intesa Sanpaolo (BIT:ISP) and UniCredit (LON:0RLS) were the joint global coordinators of the Saipem issue. ABN AMRO (AS:ABNd), Banca Akros, Banco BPM, Banco Santander (BME:SAN), Barclays (LON:BARC), BPER, Goldman Sachs (NYSE:GS) International, Societe Generale (EPA:SOGN) and Stifel were listed as the joint bookrunners.
Italian energy major Eni and state lender CDP, which control Saipem with a combined 44% stake, have fully subscribed their share of the hyper-dilutive capital hike, aimed at stabilising the group after a shock profit warning in January.
Saipem shares have nosedived this week to trade close to the 1.013 euro price at which the new stock is being issued, at a ratio of 95 new shares for every one ordinary or savings share held.
On Thursday however they closed up 5.69% to 1.17 euros.
After buying unsold new shares, banks will start offloading them, possibly creating an overhang on the market.
A banker close to the deal however said that, with such a large chunk of Saipem shares in their hands, banks might not be able to sell them quickly.
"A tap will be open for some time ahead," the banker said.
Any future headaches for banks with the sale of their Saipem stakes will be softened by some 51 million euros in fees they are sharing for being part of the Sapiem capital increase, according to the deal prospectus.
The total cost of the cash call including other fees was estimated to be a maximum of 80 million euros.
As part of the effort to stabilise Saipem's finances, earlier this year core investors and banks advanced 1.5 billion euros of the capital increase. Eni and CDP, tied by a shareholder pact, stumped up 645 million euros while the banks funded 855 million euros to help meet immediate liquidity needs.
($1 = 0.9988 euros)