Posted on 01/06/2012 12:56:04 AM PST by bruinbirdman
Struggling Italian lender UniCredit is warning investors in its €7.5bn (£6.2bn) rights issue to be ready for a break-up of the eurozone.
In the prospectus for its cash call published today, UniCredit said the eurozone sovereign debt crisis could "worsen" and might lead to the reintroduction of national currencies in "one or more eurozone countries".
"The departure or risk of departure from the euro by one or more eurozone countries and/or the abandonment of the euro as a currency could have major negative effects on both existing contractual relations and the fulfilment of obligations by the UniCredit Group," said the bank in the risk factors section of the document.
UniCredit would be highly exposed to any break-up of the euro and has extensive operations across the eurozone, including owning a major banking operation in Germany, as well as large parts of Eastern Europe.
The rights issue is designed to help UniCredit meet the new core capital requirement being imposed by the European Banking Authority.
Shares in the bank plunged on Wednesday after it revealed it would be selling the new shares at larger than expected 43pc discount to their previous closing price.
After falling 14.5pc on Wednesday, UniCredit shares were suspended
(Excerpt) Read more at telegraph.co.uk ...
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