Monte dei Paschi enlists more banks for cash call, fights legal challenge

The logo of Monte dei Paschi di Siena bank is seen in a bank entrance in Rome, Italy August 16, 2018. REUTERS/Max Rossi/File Photo

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MILAN, Aug 5 (Reuters) – State-owned Italian bank Monte dei Paschi di Siena (MPS) (BMPS.MI) said four more banks had agreed to back its upcoming 2.5 billion euro ($2.6 billion) cash call, as it moves to fend off a fresh legal challenge.

The Tuscan bank needs more cash five years after an 8 billion euro bailout that handed the state a 64% stake.

Weighed down by a mountain of legal risks following decades of mismanagement, MPS had appeared on course to draw a line under its legal woes after an Italian appeals court in May acquitted all defendants in a major derivatives case, bodiing well for other pending lawsuits that could feed claims. read more

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A year ago MPS had also reached a landmark accord with its former top shareholder that rid it of some 4 billion euros in extra-judicial claims.

However, the bank on Friday said it had received further judicial claims worth 1.8 billion euros between June and August from a consultancy firm, relating to allegedly incorrect financial information from the bank, leading to 78 million euros in provisions against legal risks in the first half .

The consultancy, which a person with knowledge of the matter identified as Martingale Risk, is acting for various institutional investors. Martingale Risk, whose services include supporting investors seeking to recover losses, did not reply to requests

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